\u3000\u3 China Vanke Co.Ltd(000002) 242 Joyoung Co.Ltd(002242) )
Event:
The company issued the annual report of 2021. In 2021, the company achieved an operating revenue of 10.54 billion yuan, a year-on-year increase of – 6.1%, a year-on-year increase of + 12.7% over the same period in 2019; The net profit attributable to the parent company was 750 million yuan, a year-on-year increase of – 20.7%; The net profit deducted from non parent company was 600 million yuan, a year-on-year increase of – 12.3%. In 2021q4, the company achieved a revenue of 3.51 billion yuan, a year-on-year increase of – 15.3%, a year-on-year increase of + 13.3% over the same period in 2019; The net profit deducted from non parent company was RMB 50 million, with a year-on-year increase of – 35.8%. The company plans to pay cash dividends of about 770 million yuan, accounting for 64% of the distributable profit. At the same time, the company announced the first phase of the employee stock ownership plan, which plans to raise an upper limit of 350 million yuan, and the shares to be repurchased by the company will not exceed 12 million shares, accounting for about 1.56% of the total share capital of the company on the announcement date.
Comments:
The optional categories are temporarily under pressure, and the cooker series is growing rapidly. 1) Domestic sales: in terms of categories, the sales of optional categories of the company declined in 2021, and the annual sales amount of food processing machine series and western electric appliance series was – 18% / – 13% year-on-year respectively; The category of partial necessities has increased steadily, and the nutrition cooker series and cooker series have increased by + 12% / + 69% year-on-year respectively. The growth of nutrition cooker series mainly comes from the growth of rice cooker and pressure cooker, and the growth of cooker series mainly comes from new products. This series is expected to contribute new performance increment in the future. According to the company’s annual report, in 2021, the company continued to rank first in the market in advantageous categories such as soybean milk machine, wall breaking machine and air fryer, and most of the other categories also ranked among the top three in the industry. In terms of new products, during the reporting period, the company launched many new products to solve customers’ pain points, such as Hongmeng Zhilian hand wash free wall breaking machine y521, steam air fryer SF series, intelligent carbon steel kettle electric rice cooker f921, etc; In the field of clean electrical appliances, shark brand has launched floor washing machine products ED200 and other explosive products with market competitiveness. In terms of online channels, affected by the high base effect, retail is under pressure. According to the business consultant data, the sales of small kitchen appliances from January to February 2022 were – 10% year-on-year, of which the sales of wall breaking machine / soybean milk machine / rice cooker were – 21% / – 27% / – 16% year-on-year respectively; The sales of air fryer / electric kettle were + 82% / + 21% year-on-year respectively, and the feedback from the new product market was good. In terms of offline channels, the company continues to develop shopping malls and other channels to broaden the road of high-end transformation; On the other hand, sink the channel to build regional brand stores, in which cookers have made a breakthrough in regional landmark stores. 2) Export: overseas demand continued to be strong in 2021, and the company benefited from JS global order transfer. During the reporting period, the company’s export revenue was 1.46 billion yuan, a year-on-year increase of + 56%. Recently, the company announced that the total amount of related party transactions with JS global and shark ninja in 2022 is expected to not exceed US $210 million (equivalent to about RMB 1.35 billion), and the company’s subsequent export business is expected to maintain stable development.
Under the same caliber, the gross profit margin decreased slightly. The gross profit margin of the company in 2021 was 27.8%, down 4.3pcts compared with the same period in 2020, of which the gross profit margin in the fourth quarter of 2021 was 23.5%, down 9.4pcts compared with the same period in 2020. There are two main reasons for the decline of the company’s gross profit margin: first, the statistical caliber has changed. Since the cooking utensils series has developed into one of the key product lines, the company has separately disclosed the business data of cooking utensils series since 2021. If this influence is excluded, the adjusted gross profit margin of the company is 30.5%, down 1.6% compared with the same period in 2020, which is in the normal fluctuation range; Second, due to the large increase in the price of raw materials in 2021, the cost side of the company is temporarily under pressure; Third, the competitive pressure in the wall breaking machine industry, which accounts for a high proportion of the company’s revenue, has increased, and the company has adopted a certain price reduction strategy. During the reporting period, the company’s sales expense ratio was 15.0%, a year-on-year decrease of 1.7pcts; The management expense ratio was 3.3%, a year-on-year decrease of 0.2 PCTs, and the R & D investment was 360 million yuan, a year-on-year increase of + 3.3%.
Profit forecast, valuation and rating: as the leader of China’s small household appliance industry, the company focuses on its core business, takes technological innovation as the driving force, actively seizes growth opportunities and enlarges the collaborative value of the company and shark brand. In view of the decline in sales of some categories of the company and the pressure on the cost side, the net profit attributable to the parent company from 2022 to 2023 was reduced to 10.0 (down 9.1%) and 1.15 billion yuan (down 9.9%), and the forecast of net profit attributable to the parent company in 2024 was introduced to 1.33 billion yuan, maintaining the “buy” rating.
Risk tip: raw material price rise risk, shark expansion is less than expected, and market competition intensifies.
