\u3000\u3 China Vanke Co.Ltd(000002) 563 Zhejiang Semir Garment Co.Ltd(002563) )
Performance review
The company released its performance for the whole year of 2021 on March 30, with a total operating revenue of 15.42 billion yuan (+ 1.41%) and a net profit attributable to the parent company of 1.486 billion yuan (+ 84.50%); Excluding the impact of stripping K business for 20 years, the revenue / net profit increased by 10% / 14% respectively, which was in line with previous expectations.
Business analysis
The revenue and gross profit margin of children’s wear and adult wear increased in 21 years. In 21 years, the company’s adult clothing business realized a revenue of 5.027 billion yuan (+ 1.43%), and the annual flow is still about 20% lower than that estimated in 19 years, which is still in the process of adjustment; However, its gross profit margin increased by 4.25 PCT to 40.13% year-on-year, reflecting the effective improvement of product power; The children’s wear business achieved a revenue of 10.272 billion yuan (+ 1.38%). It is estimated that the annual flow achieved a single digit growth compared with 19 years. At the same time, the gross profit margin increased by 1.30pct to 43.74% year-on-year, realizing contrarian growth.
The operation of 4q21 is weakened by external influence. 4q21 achieved revenue of 5.399 billion yuan (- 6.2%) in a single quarter; The net profit was 544 million yuan (- 7.8%), mainly due to repeated local epidemics, abnormal temperature in the fourth quarter and a high base of 4q20. The gross profit margin of 4q21 is 41.5% (+ 3.72pct), which mainly benefits from the strict control of discounts; The net interest rate is 10.06% (-0.18pct), which is mainly due to the slowdown of income but the rigidity of expenses. In the long run, the net interest rate of the company will remain stable and rising.
The cash reserve was sufficient and the proportion of inventory increased. By the end of the 21st century, the company’s inventory accounted for 20.24% (+ 6.12pct) of total assets, which was mainly due to the increase of 2h21 goods preparation and the slowdown of goods turnover affected by the weather; In terms of cash flow, the net cash flow from operating activities of the company was 2.076 billion yuan, a year-on-year decrease of 53.4%, mainly due to the funds occupied by 2h21 procurement of winter clothes.
Under the background of increasing concentration, it is optimistic that the long-term market share of the company will continue to grow steadily. In 201521, the market share of top 11 children’s wear brands increased from 11.2% to 16.4%, and the market share of top 11 leisure wear brands increased from 10.3% to 13.8%. The increasing trend of concentration is obvious, superimposed with the downward trend of international brands, which is conducive to the further increase of the market share of the company’s leading brands such as barabara and Senma.
Profit and investment forecast
Considering that the company’s adult clothing business is still in the process of repair, the growth rate of children’s clothing has slowed down and are affected by the epidemic, the profit forecast for 22-23 years and 24 years has been reduced. It is expected that the company’s children’s clothing business will still maintain a growth of more than 15% in 22-24 years, the double-digit growth of adult clothing will be restored to the level of 19 years in 23 years, and the net interest rate will maintain a steady increase. The net profit attributable to the parent in 22-24 years is expected to be 17.13 (down 6%) / 19.86 (down 10%) / 2.381 billion yuan, The corresponding PE is 11 / 9 / 8 times, maintaining the “buy” rating.
Risk tip: the local outbreak of the epidemic affects terminal sales, and the upgrade of adult clothing brand is less than expected.
