\u3000\u3 China Vanke Co.Ltd(000002) 818 Chengdu Fusen Noble-House Industrial Co.Ltd(002818) )
Event overview
Chengdu Fusen Noble-House Industrial Co.Ltd(002818) released the annual report of 2021. In 2021, the company achieved a revenue of 1.536 billion yuan, a year-on-year increase of 15.76%; The net profit attributable to the parent company was 918 million yuan, a year-on-year increase of 18.74%; The net profit attributable to the parent company after deduction was 799 million yuan, with a year-on-year increase of 20.75%. In a single quarter, the company achieved revenue of 3.45/3.97/3.86/408 billion yuan in Q1 / Q2 / Q3 / Q4 in 2021, with a year-on-year increase of 12.84% / 31.42% / 11.04% / 9.84%, and net profit attributable to parent company of 1.69/2.9/2.35/223 million yuan, with a year-on-year increase of 6.12% / 92.17% / 26.56% / – 19.36%.
Revenue side: the performance of 21 years has increased significantly year-on-year, and the decoration business has increased rapidly
By product, in 2021, the company’s market leasing and service / marketing advertising planning / entrusted operation and management / decoration works / other revenues were 1.272/0.10/0.13/1.27/116 billion yuan respectively, with a year-on-year increase of + 9.15% / + 35.88% / – 15.97% / + 88.42% / + 58.93% respectively, and the above businesses accounted for 82.73% / 0.64% / 0.83% / 8.24% / 7.55% respectively. In terms of basic business, the company continued to promote the construction of large-scale store operation system, focused on self operated store operation, continued to develop franchise entrusted management projects, optimized store structure, strengthened refined management, reduced costs and increased efficiency, and achieved significant year-on-year growth in performance; By the end of 2021, the scale of self operated, franchised and entrusted stores of the company has exceeded 1.5 million square meters, including 1.1 million square meters of self operated stores and more than 3500 merchants. In addition, relying on its own resources and capital advantages in the home building materials industry chain and the mature decoration design, management and construction capacity of Chengdu Fusen Noble-House Industrial Co.Ltd(002818) Jiannan, the decoration business of the company has deeply expanded the fine decoration business of commercial housing, as well as the fine decoration business of all kinds of tooling, decoration and real estate developers, with a year-on-year high growth in 21 years. In terms of expanding business, the company continued to make efforts to develop a new retail strategy, opened a new “Caramel box” self operated store in 21 years, and fuxiaosen smart home experience store characterized by full house customization has been put into trial operation; Fully integrate art resources, establish cooperation with 38 artists and 9 institutions, hold 22 art exhibitions and art activities throughout the year, and attract Wuxi Online Offline Communication Information Technology Co.Ltd(300959) passenger flow of 4.26 million; Actively expand the import and export agency business, continue to maintain close cooperation with 20 ports / airports in 9 Asian and European countries and 13 ports in China, and realize the steady growth of import and export trade throughout the year.
Profit side: the gross profit margin increased slightly, and the expense rate increased during the period.
On the profit side, the gross profit margin and net profit margin of the company in 2021 were 70.06% and 60.90% respectively, with a year-on-year increase of + 2.51pct and + 1.94pct; By quarter, the gross profit margin and net profit margin of Q4 in a single quarter were 68.24% and 54.88% respectively, with a year-on-year increase of + 0.34pct and -22.42pct respectively, and a month on month increase of -0.68pct and -6.83pct respectively. The year-on-year decline in the company’s 2021q4 net interest rate was mainly due to the decrease in net investment income and net income from changes in fair value, of which the net investment income was about RMB 23.82 million, a year-on-year -44.91%, and the net income from changes in fair value was about RMB 7.01 million, a year-on-year -89.98%. On the expense side, the company’s expense rate during 2021 was 5.48%, with a year-on-year increase of + 1.21pct, of which the sales expense rate, management expense rate, R & D expense rate and financial expense rate were 0.46%, 5.04%, 0.00% and – 0.02% respectively, with a year-on-year increase of + 0.10pct, + 0.76pct, + 0.00pct and + 0.35pct respectively. Quarter by quarter, the expense rate during Q4 was 6.06%, with a year-on-year increase of + 2.49pct, of which the sales expense rate, management expense rate, R & D expense rate and financial expense rate were 0.74%, 5.42%, 0.00% and – 0.10% respectively, with a year-on-year increase of -0.03pct, + 2.58pct, + 0.00pct and -0.06pct respectively. The year-on-year increase in the management fee rate is mainly due to the increase in employee salary and consulting service fee in the current period; The decrease in financial expense rate was mainly due to the decrease in interest income and the payment of bank interest for the same period by repurchasing shares that did not meet the sales restriction conditions.
On March 31, 2022, the company announced that the board of directors reviewed and approved the company’s profit distribution plan for 2021. In 2021, the company achieved revenue, net profit attributable to the parent company and net profit of the parent company were RMB 1536 million, 918 million and 1522 million respectively. Based on the expectation and confidence of future development and in order to reflect the practical return to shareholders, the company plans to take the total share capital of 748 million shares on December 31, 2021 as the base, Distribute cash of 8 yuan (including tax) to all shareholders for every 10 shares, with a total cash dividend of 599 million yuan, and the calculated dividend rate reaches 6.8% (according to the closing price on March 30).
Investment advice
Stimulated by the urbanization rate and income increase, the demand for home furnishings will continue to release. As a leader in Chengdu, the company has obvious first mover advantage and will continue to benefit. The company is positioned as a comprehensive home service provider and tries to expand its business around the layout of the industrial chain. Considering the impact of the overall downstream market environment and the fluctuation of the company’s investment income, we lowered the forecast of the company’s revenue of 1.868/1.980 billion yuan in 22-23 to 1.725/1.900 billion yuan, and the revenue in 2024 was 2.074 billion yuan; Reduce eps1 in 22-23 years The forecast of 52 / 1.59 yuan is 1.36/1.47 yuan, and the EPS in 2024 is 1.58 yuan. Corresponding to the closing price of 11.83 yuan / share on March 30, 2021, PE was 8.71/8.06/7.47 times respectively, maintaining the “buy” rating of the company.
Risk tips
1) real estate sales were lower than expected, resulting in weak household demand. 2) Competition in the home retail market in Sichuan has intensified. 3) The company’s investment income is lower than expected.
