\u3000\u30003 Eternal Asia Supply Chain Management Ltd(002183) 00218)
The company released its 2021 annual report, and achieved a revenue of 2.046 billion yuan during the period, an increase of 32.3% at the same time, reaching a record high; The net profit attributable to the parent company was 132 million yuan, an increase of 161.42% at the same time; The net profit attributable to the parent company after deducting non profits was 121 million yuan, an increase of 239.1% at the same time. In Q4, the revenue / net profit attributable to the parent company / net profit attributable to the parent company after deduction of non-profit was RMB 558 / 0.33 / 0.27 million respectively, with a year-on-year increase of + 12.06% / - 0.3% / + 11.18% respectively. In addition, the company issued the third phase of the employee stock ownership plan, which plans to issue a total of no more than 4.5088 million ordinary shares to no more than 500 core personnel of the company (the source is the ordinary shares repurchased by the company's special repurchase account, accounting for 2.08% of the share capital), the price of each share is 10.54 yuan, and the raised capital is no more than 47.55 million yuan (11 / 36.55 million yuan self raised / borrowed respectively). The unlocking condition is that the growth rate of net profit attributable to the parent company after deducting non profits in 2022 shall not be less than 25%.
High quality large customers continued to increase in volume and price, and the annual revenue increased significantly.
In terms of customers, during the period, the company continued to develop new customers to ensure long-term growth, and signed new contracts with leading customers in downstream fields such as Nike, IKEA, Toyota, great wall, Byd Company Limited(002594) , Google and europay. Deepen cooperation with Arthur, apple, puma, ashey, etc. In the future, with the continuous optimization of production capacity (the total production capacity in 2021 is 85 million meters, and two production lines in Vietnam are expected to be commissioned and put into operation in 2022q2. At the same time, it is planned to add three dry process production lines (including one development experimental line) in 2022) and the continuous improvement of product power (the annual R & D cost is about 128 million yuan, and the R & D cost rate is + 0.77 PCTs to 6.24%), the company's share in customers is expected to continue to increase, Provide impetus for long-term good growth (for example, Nike, Xiaopeng, great wall, etc. are expected to speed up in 22h2).
From the perspective of volume and price, the sales unit price of main leather products continued to increase month on month in 2021 (Q1 / H1 / Q3 / annual unit price + 11% / 13.1% / 12.57% / 15% respectively), mainly due to the increase in the proportion of high-quality customers and medium and high-end categories throughout the year. In addition, the price increase under the price rise of raw materials also contributed to some growth. The sales volume of main leather products in the whole year was + 12.3% (H1 + 49.2%) year-on-year, and the growth slowed down month on month, mainly due to the decline of short-term shipments in the second half of the year due to the production of some customers affected by shipping and epidemic situations outside China. However, with the deepening cooperation with various customers, the long-term sales volume is expected to grow steadily.
The product / customer structure was upgraded and the profitability was significantly improved. During the period, the company's gross profit margin was 22.87% (+ 3.57pcts), which mainly benefited from the continuous volume of large customers with high gross profit margin (according to the company's announcement, the original gross profit margin was about 20%, and most of the new customers were 30% - 50%). In terms of expenses, the ratio of sales / management expenses during the period was flat year-on-year (+ 0.07 / - 0.16pcts). At the same time, the company continued to increase R & D investment to provide guarantee for the continuous improvement of the competitiveness of subsequent companies. Overall, the net interest rate rose from + 3.19 PCTs to 6.58% year-on-year, of which the net interest rate of H2 was 4.94%, down from H1 (7.32%), mainly due to the impact of power and production restriction policies on the company's operation in the second half of the year and the increase of natural gas expenses in winter by about 4.5-5.5 million / month.
The operating capacity continued to improve, and the cash inflow decreased slightly with the increase of costs. During the period, the company's inventory turnover days ranged from -2.01 days to 92.98 days year-on-year, and the turnover days of accounts receivable ranged from -2.8 days to 33.09 days year-on-year. With the significant growth of the company's revenue throughout the year, the turnover days of inventory / accounts receivable increased only slightly compared with 2019. In terms of cash flow, the net cash flow from operating activities during the period was 137 million yuan (- 8.7%), which decreased slightly, mainly due to the increase of brand customers and accounts receivable due to the significant increase of company sales during the period.
The trend of high-end industry and domestic substitution is prominent, and the company has ushered in a breakthrough in ten years of deep cultivation. From the development trend of the industry, PU leather is gradually replacing PVC leather under the promotion of environmental protection policies and the strengthening of ideas. Among them, healthy, green and eco-friendly waterborne / solvent-free PU leather has become the general trend of the industry in the future, and has a rapid penetration in high-end applications such as downstream International head sports and leisure brands, high-end sofa home, automobile interior decoration and so on. In the past, the company continued to invest heavily in research and development, and laid out new products, waterborne / solvent-free leather and reserve key customers. Since the second half of 2019, international key customers have entered a continuous breakthrough period. Considering that the company still has many high-quality reserve customers to be released, it is expected to usher in a golden period of development.
Investment suggestion: the company is the global leader in ecological functional PU leather. Based on research and development, the company will compete in the foreign-funded high-end PU leather market and enter the stage of large-scale production of key customers. With high gross profit margin, large number of customers and superimposed scale effect, the company has entered the development channel of high growth and high quality. In the short term, affected by China's epidemic and shipping, some customer orders in 2022h1 may be delayed (such as Chivas, Ashley, etc.), while the price of upstream raw materials has increased significantly, and the short-term gross profit margin is expected to be under pressure. We expect that the net profit attributable to the parent company in 2022 / 23 / 24 will be RMB 191 / 258 / 323 million (compared with RMB 283 million in the previous 22 / 23), with a year-on-year increase of 45% / 35% / 25%, and the corresponding valuations will be 15 / 11 / 9 times respectively, maintaining the "buy" rating.
Risk warning: raw materials fluctuate greatly; Risk of sharp rise in natural gas prices in winter; The epidemic situation in Southeast Asia affects the production progress of Vietnam; The demand of downstream customers decreased. The public materials used in the research report may have the risk of information lag or untimely update.
