\u3000\u3 China Vanke Co.Ltd(000002) 242 Joyoung Co.Ltd(002242) )
Event: Joyoung Co.Ltd(002242) released the 2021 annual report. In 2021, the company realized an operating revenue of 10.54 billion yuan, a year-on-year increase of – 6.09%; The net profit attributable to the parent company was 746 million yuan, a year-on-year increase of – 20.69%. Q4 company achieved an operating revenue of 3.509 billion yuan, a year-on-year increase of – 15.27%; The net profit attributable to the parent company was 82 million yuan, a year-on-year increase of – 72.16%. The dividend scheme pays 10 yuan for every 10 shares, with a dividend rate of 102.08% and a dividend rate of 5.97%.
Q4 performance is under pressure in the short term, and the harvest of cooking utensils business is increasing. In terms of business, the company’s food processing machines, nutrition cookers, Western-style electrical appliances and cooking utensils achieved revenue of RMB 4354 million, RMB 3832 million, RMB 1325 million and RMB 752 million respectively, with a year-on-year growth of – 17.87%, + 11.87%, – 13.49% and + 68.70%. Among them, the cooking utensils business achieved rapid growth and has developed into one of the company’s key product lines, and other categories are relatively stable. In terms of regions, the company’s domestic and overseas businesses achieved revenue of RMB 9.082 billion and RMB 1.458 billion respectively, with a year-on-year increase of – 11.73% and + 56.09% respectively. The rapid growth of overseas business is mainly due to the increase of related sales between the company and JS global trading HK Limited. In addition, in terms of channels, the online and offline revenue were 6.173 billion yuan and 4.367 billion yuan respectively, with a year-on-year increase of – 4.24% and – 8.58%, and the proportion of channels was 58.57% and 41.43% respectively, of which the proportion of online revenue increased slightly by 1.13 PCT year-on-year.
The rising cost of raw materials is under pressure to optimize internal efficiency and resist risks. The annual gross profit margin was 27.79%, year-on-year -4.26pct; The net interest rate was 6.65%, with a year-on-year increase of -1.51pct. Q4 gross profit margin was 23.49%, year-on-year -10.20pct; The net interest rate was 1.91%, year-on-year -4.85pct. The decline of the company’s gross profit margin was mainly due to 1) the continuous rise in the price of bulk commodities and raw materials in 21 years; 2) The new accounting standards include transportation expenses from the original sales expenses into the impact of operating costs. If the transportation fee is restored to the sales expense account, the company’s annual gross profit margin is 30.50%, year-on-year -1.55pct, and the domestic gross profit margin is + 0.29pct year-on-year. In order to cope with the pressure of rising costs, the company optimized its internal efficiency. The annual rates of sales, management, R & D and financial expenses were 14.99, 3.33, 3.39 and – 0.17%, respectively -1.65, – 0.22, + 0.31 and – 0.18pct year-on-year; Q4 sales, management, R & D and financial expense rates were 15.49%, 3.43%, 3.73 and 0.09%, respectively -5.69, -0.46, + 0.65 and -0.25pct year-on-year.
Operating cash flow declined year-on-year. 1) In the past 21 years, the company’s cash + other current assets totaled 2.124 billion yuan, a year-on-year increase of + 3.29%; Contract liabilities + other current liabilities (original accounts received in advance) totaled 277 million yuan, a year-on-year increase of – 56.77%; Notes receivable and accounts receivable totaled 2.370 billion yuan, a year-on-year increase of + 12.42%, mainly due to the increase of the company’s accounts receivable from JS global, which has not reached the accounting period at present. 2) In terms of turnover, the company’s inventory turnover days were -0.81 days year-on-year, slightly improved compared with 20 years; Days of accounts receivable + 7 days year-on-year. 3) In the past 20 years, the net operating cash flow of the company was -35 million yuan, a year-on-year decrease of – 101.73%, mainly due to the payment of raw materials in the previous period; Q4 net operating cash flow was 425 million, a year-on-year increase of – 63.76%.
Broaden the product matrix and cut into the clean electrical circuit. According to the company, in the future, based on small kitchen appliances, Jiuyang will gradually professionalize and expand the categories of cooking utensils, cleaning appliances and water appliances, and broaden the product matrix. On the one hand, the company will consolidate its leading position in small kitchen appliances such as wall breaking machines, rice cookers and air fryers through technological upgrading. On the other hand, the company will increase R & D investment in cooking utensils, cleaning appliances and tea bar machines, so as to create and improve product power from the perspective of user needs and pain points. In the future, Jiuyang clean electrical products will be positioned at the middle end, which can make better use of the company’s existing middle-end channel resources to start quickly, while shark products will be positioned at the middle and high end, so as to cover a broader customer base and increase the company’s revenue growth point.
Launch employee stock ownership plan to deeply bind the interests of core personnel. The company plans to launch the first phase of employee stock ownership plan, which covers the executives and core managers of the company and its subsidiaries. The total number is expected to be no more than 30, and the capital scale is no more than 350 million yuan. The shareholding plan will assess the performance of the holders in five fiscal years from 2022 to 2026. ESOP will help the company establish and improve the long-term incentive mechanism, fully and effectively mobilize the initiative, enthusiasm and creativity of managers and core employees, attract and retain excellent talents, deeply bind personal interests with the interests of the company, and help to improve the cohesion of employees and the core competitiveness of the company.
Profit forecast and investment rating: Although the rise of raw materials and the slow recovery of market demand in 2021 have brought some challenges to the development of the company, the ownership of small kitchen appliances is far from reaching the ceiling in the long run. As an industry leader, the company has many advantages such as brand, channel and supply chain. It is believed that the company will optimize the product structure, broaden the product matrix The adjustment of channel layout can continue to achieve stable growth. We estimate that the company’s operating revenue in 22-24 years will be 11.601133.01/14.889 billion yuan respectively, with a year-on-year increase of + 10.1% / + 14.7% / + 11.9% respectively; The net profit attributable to the parent company was 841 / 942 / 1061 million yuan, with a year-on-year increase of + 12.8% / + 12.0% / + 12.7% respectively, and the corresponding PE was 15.28/13.64/12.11 times. Maintain the “buy” rating.
Risk factors: repeated outbreaks outside China, sharp rise in raw material prices, intensified industry competition, and less than expected development of new products.
