\u3000\u3 Shengda Resources Co.Ltd(000603) 877 Ningbo Peacebird Fashion Co.Ltd(603877) )
Event: the company released its 2021 annual report, and achieved an annual operating revenue of 10.921 billion yuan, a year-on-year increase of + 16.34%; The net profit attributable to the parent company was 677 million yuan, a year-on-year increase of - 4.99%; The net profit deducted from non parent company was 520 million yuan, a year-on-year increase of - 7.26%. It is proposed to distribute a cash dividend of 6 yuan for every 10 shares to all shareholders.
Comments:
All channels achieved rapid growth, which dragged down the performance of the whole year in the second half of the year. In terms of sub channels, the company's direct / franchise / online channels achieved an operating revenue of RMB 4.614 billion, 28.53 billion and 3.364 billion respectively, with a year-on-year increase of + 13.21% / + 23.64% / + 19.94% respectively. It strengthened the layout of content E-commerce & diversified e-commerce channels and promoted the rapid growth of online business; The operation quality of direct channels was improved, and the comparable same store revenue was + 5.9% year-on-year; Franchise channels resumed and the growth momentum continued. In terms of the number of stores, there are 62 / 536 to 1616 / 3598 direct / franchise channels respectively. From the semi annual situation, the company's 21h1 / H2 achieved revenue of 5.02/5.91 billion yuan respectively, with a year-on-year increase of + 55.9% / - 4.3%, and net profit attributable to parent company of 4.1/270 million yuan respectively, with a year-on-year increase of + 240.5% / - 55%. The decline in performance in the second half of the year was mainly due to: (1) repeated outbreaks in many places since Q3, store operation under pressure; (2) high temperature, which affected the sales of autumn and winter categories.
The cost investment increases, and the profitability is under pressure in the short term. In 2021, the company's gross profit margin increased from + 0.44 PCTs to 52.93% year-on-year, of which the direct / franchise / online gross profit margin changed by + 0.1 / - 2.36 / + 1.91 PCTs respectively, and the franchise channel decreased slightly. Due to the increase of the proportion of old models, the supply discount was low. The company's sales / management / R & D / financial expense ratio increased from + 1.3 / + 0.5 / + 0.2 / + 0.4pcts to 36.2% / 7.9% / 1.4% / 0.6% year-on-year respectively. Brand marketing and digital transformation increased the cost. Under the comprehensive influence, the net profit margin of the company increased from -1.33pct to 6.2% year-on-year. At the end of 2021, the company's inventory scale was + 12.6% to 2.54 billion yuan year-on-year, the number of inventory turnover days was + 2 days to 168 days year-on-year, and the number of accounts receivable turnover days was - 4 days to 23 days.
Digital driven commodity development, channel optimization and strengthening consumer communication. By brand, in 2021, the revenue of Ningbo Peacebird Fashion Co.Ltd(603877) women's clothing / men's clothing / leting girls' clothing / minipeace children's clothing reached 44.84/33.7/13.98/1.273 billion yuan respectively, with a year-on-year increase of 18.6% / 18.99% / 5.2% / 29.53% respectively. In the future, the company will improve the accuracy of product development through digitalization, and actively explore new channels for social retail tiktok, and interact with consumers through the way of jowl, little red book and other popular ways to improve brand stickiness.
Investment suggestion: affected by the epidemic, the company's performance is under pressure in the short term, and is optimistic about the high-quality growth of performance brought by medium and long-term digital transformation & channel efficiency improvement. The company drives commodity development with data and continues to promote the adjustment of channel structure. Considering the continuous impact of the epidemic, we lowered our profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 800 / 95 / 1.12 billion respectively (originally predicted to be RMB 1.24/1.49 billion in 2022 / 23), corresponding to the current market value PE of 13 / 11 / 9x respectively, maintaining the "buy" rating.
Risk tip: the epidemic affects offline retail, the channel adjustment is less than expected, and the digital transformation is less than expected.
