\u3000\u3 Shengda Resources Co.Ltd(000603) 877 Ningbo Peacebird Fashion Co.Ltd(603877) )
Event overview
In 2021, the company’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were 109.21/6.77/520 million yuan respectively, with a year-on-year increase of 16% / – 5% / – 7%. Non economic mainly included government subsidy of 200 million yuan, investment income of 44 million yuan, non operating expenditure of 37 million yuan and income tax impact of – 54 million yuan, which basically met the performance forecast. 21q4 revenue / net profit attributable to the parent company were RMB 3.512123 billion respectively, with a year-on-year decrease of 9% / 69% and a month on month slowdown (21q3 revenue growth rate was 4%), mainly due to the lower than expected sales on the double ten first tier and the decline offline (21q4 direct / franchise / online revenue increased by – 22% / – 10% / 8% year-on-year respectively). The company distributed a cash dividend of 0.6 yuan per share, with a dividend rate of 42%.
Analysis and judgment:
Online growth slowed, franchisees continued to expand and open stores, and the efficiency of Direct stores increased by 9%. In 2021, the revenue from direct sales / franchising / online / clothing manufacturing was 4.61/28.5/33.6/0.24 billion yuan respectively, accounting for 42% / 26% / 31% / 1% respectively, with a year-on-year increase of 13% / 24% / 20% / – 75%. The sharp decline in clothing manufacturing was mainly due to the decrease in the production of epidemic prevention materials; In terms of splitting, the number of direct / franchise stores was 1616 / 3598, with a year-on-year increase of 4% / 18%, and the efficiency of direct / franchise stores was 2.85790000 yuan, with a year-on-year increase of 9% / 5%. The GMV in the online channel increased by 7 times or more than that of the previous year, accounting for about 20% of the electricity supplier’s revenue. However, the sales of the tiktok double eleven were lower than expected. We estimate that Tmall has slipped and vip.com has been basically unchanged. The number of direct / franchise stores of 21q4 company was – 37 / 173, and the number of franchise stores was slower than that of Q3 (254 in 21q3).
The growth rate of children’s wear is the fastest, the growth of women’s wear and men’s wear mainly depends on the contribution of opening stores, and the growth rate of leting slows down. The growth rate of women’s wear and leting is slower than that of 20 years, and the growth rate of men’s wear, children’s wear and others is higher than that of 20 years (the growth rate of women’s wear / men’s wear / leting / children’s wear / others in 20 years is 28% / 8% / 18% / 9% / 8% respectively, and the growth rate of 21 years is 19% / 19% / 5% / 30% / 16% respectively). The number of head offices of the company was 5214, with a year-on-year increase of 13%; In terms of splitting, the number of women’s clothing / men’s clothing / leting / children’s clothing / other stores increased by 19% / 17% / – 1% / 12% / – 21% to 2028 / 1573 / 690 / 811 / 112 respectively. The growth rate of 21q4 women’s clothing / men’s clothing / leting / children’s clothing / other income was – 18% / – 1% / – 18% / 2% / – 6% respectively, and the growth rate slowed down month on month (the growth rate of 21q3 was 4% / 9% / – 4% / 12% / – 3% respectively).
The proportion of old model shipments increased and the gross profit margin of franchisees decreased. In 2021, the gross profit margin was 53%, with a year-on-year increase of 0.44pct, of which the gross profit margin of direct sales / franchise / online was 65.71% / 42.71% / 44.95% respectively, with a year-on-year increase of 0.1 / – 2.36/1.91pct. The decline in franchise gross profit margin was mainly due to the increase in the proportion of old models in franchise delivery. The gross profit margin of women’s clothing / men’s clothing / leting / children’s clothing / other clothing was 55.87% / 53.32% / 48.41% / 51.27% / 40.98% respectively, with a year-on-year increase of 0.37 / – 1.1 / – 1 / 0.12 / – 3.37pct. The gross profit margin of men’s clothing decreased mainly due to the trusteeship and higher discount rate in 20q4. After the trusteeship was cancelled in 21 years, the discount rate returned to normal. 21q4’s gross profit margin was 51.55%, a year-on-year decrease of 2.46pct and a month on month increase of 1.5pct. The decrease in gross profit margin was mainly due to the large number of franchisees and stores, and the gross profit was offset by prop subsidies and decoration subsidies.
Deducting the decline of non net interest rate, there are one-time expenses. In 2021, the net interest rate was 6.2%, a year-on-year decrease of 1.33pct, the deduction of non net interest rate was 4.8%, a year-on-year decrease of 1.2pct, which was mainly due to the increase of expense rate, in which the sales / management / R & D / financial expense rate was 36.16% / 6.49% / 1.39% / 0.62% respectively, and a year-on-year increase of 1.30/0.36/0.15/0.42pct. In terms of splitting, the increase of sales expense rate was mainly due to the increase of advertising expense rate by 1PCT, in which we calculated that the one-time expense was about 130 million yuan. The net profit margin of 21q4 was 3.51%, down 6.88pct year-on-year, down 2.45pct month on month, and the net profit margin deducted was 3.2%, down 5.8pct year on year, down 1.8pct month on month. Mainly due to the decline of gross profit margin and the increase of expense rate, the sales / management expense rate of 21q4 was 36.37% / 6.74% and 3.31/0.81pct year on year respectively.
Inventories improved month on month. At the end of 2021, the inventory was 2.54 billion yuan, with a year-on-year increase of 13% and a month-on-month decrease of 10% at the end of 21q3. The inventory turnover days were 168 days, with a year-on-year increase of 2 days, of which the proportion within 1 year / 1-2 years / 2-3 years / more was 69% / 24% / 5% / 3% respectively, and the inventory falling price / inventory was 6.3%; The turnover days of accounts receivable were 23 days, a year-on-year decrease of 4 days, and the turnover days of accounts payable were 144 days, a year-on-year decrease of 6.6 days. In 2021, the operating cash flow was 1.3 billion yuan, with a year-on-year increase of 13%, the operating cash flow / net profit attributable to parent company was 192%, with a year-on-year increase of 30pct. The higher operating cash flow than net profit was mainly due to the depreciation of the right to use assets of 485 million yuan due to the change of leasing accounting standards.
Investment advice
We estimate that in January and February, affected by the high base, the revenue side was basically flat. In March, affected by the repeated epidemic, half of the stores were closed, the revenue side fell year-on-year, and the profit side fell more sharply due to the high base. However: (1) the growth trend of franchisees restarting to open stores remained unchanged; (2) The improvement trend of men’s clothing and children’s clothing remains unchanged, and we look forward to the improvement of leting in the future; (3) The improvement logic of deducting non net profit remains unchanged, and there is a one-time cost impact in 2021.
Considering the impact of the epidemic, the income of 22 / 23 years was reduced from 13.9/16 billion yuan to 12.1/13.9 billion yuan, the new 24-year income was 15.7 billion yuan, the net profit attributable to the mother was reduced from 1.26/1.517 billion yuan to 885/1.062 million yuan, the new 24-year net profit attributable to the mother was 1.26 billion yuan, the EPS was reduced from 2.64/3.18 yuan to 1.86/2.23 yuan, the new 24-year EPS was 2.64 yuan, the stock price was 20.35 yuan on March 29, 2022, and the PE of 22 / 23 / 24 years was 11 / 9 / 8x. In the short term, affected by the epidemic and one-time expenses, The long-term growth logic remains unchanged and the “buy” rating is maintained.
Risk tips
The uncertainty of epidemic development; Leisure industry is diverted by sports; Store opening is lower than expected; The cultivation of new brands is not as expected; Systemic risk.
