\u3000\u3 China Vanke Co.Ltd(000002) 563 Zhejiang Semir Garment Co.Ltd(002563) )
Events
The company released its annual report for 2021. In 2021, it achieved a revenue of 15.42 billion yuan, a year-on-year increase of 1.41%, and a net profit attributable to the parent company of 1.486 billion yuan, a year-on-year increase of 84.5%; The basic earnings per share is 0.55 yuan / share, and the proposed final dividend is 0.5 yuan / share (including tax).
Key investment points
In 2021, the company's revenue basically recovered to the comparable level in the same period of 19 years, and 21h2 was under pressure due to external factors such as the epidemic. On the revenue side, in 2021, the company achieved a revenue of 15.42 billion yuan, a year-on-year increase of 1.41%, of which 21q4 achieved a revenue of 5.399 billion yuan, a year-on-year decrease of 6.19%. Excluding the impact of French business, the company's annual revenue increased by 10.25% year-on-year, and is expected to return to the 95% level in 19 years. Quarterly, we estimate that the revenue growth of 21h1, 21q3 and 21q4 are: an increase of 29%, an increase of low single digits and a decline in the number of units. On the net profit side, in 2021, the company realized a net profit attributable to the parent company of 1.486 billion yuan, an increase of 84.5% year-on-year, of which 21q4 realized a net profit attributable to the parent company of 544 million yuan, a decrease of 7.82% year-on-year. Excluding the impact of French business, the company's annual net profit attributable to the parent company increased by 14.13% year-on-year. We estimate that the year-on-year growth of the net profit attributable to the parent company of 21h1, 21q3 and 21q4 are respectively: an increase of about 85%, a decrease of about 20%, and a decline of medium. The company's revenue and performance in the second half of the year were disturbed by China's epidemic situation, extreme natural disasters, weather and other factors.
The company's children's wear business has strong toughness, and leisure wear will start again with a new brand positioning. In terms of leisure clothing, in 2021, the company's leisure clothing revenue was 5.027 billion yuan, a year-on-year increase of 1.4%, accounting for 32.6%. We estimate that the company's leisure clothing business has recovered to more than 75% in the same period of 19 years, and the year-on-year growth rates of 21h1 and H2 revenue are 28.7% and - 14.5% respectively. In 2021, the company defined Senma brand as "comfortable fashion", passed on product value around the selling points of product functions, focused on the young people after 95 and strengthened the expansion of social retail. In terms of children's clothing, excluding the comparable caliber of French business, the company's children's clothing revenue in 2021 was 10.272 billion yuan, a year-on-year increase of 14.9%, accounting for 66.2%. We estimate that the company's children's clothing business increased by about 6% compared with the same period of 19 years, and the revenue growth of 21h1 and H2 were 35.5% and 4.3% respectively. The children's clothing business showed strong resilience under the disturbance of external factors. In 2021, the brand of balabalabala was upgraded and positioned as the "children's fashion brand that knows the most about growth". In terms of products, it continued to invest in research and development of clothing patterns, colors, fabrics and shapes, developed a series of innovative fabrics such as "zero carbon Tencel" and "all cotton moisture absorption and quick drying", and further strengthened the differentiated development of various product lines for infants and young children, middle-aged and old children, shoes and home furnishings. By the end of 21, Nearly 100 independent stores of balabalabala infant and child line have been opened, and the sales and profitability of stores have increased steadily.
In 2021, online channels performed steadily, and offline channels focused on improving the retail operation capacity of stores. Excluding the impact of French business, in terms of online channels, the revenue in 2021 was 6.458 billion yuan, a year-on-year increase of 13.1%, accounting for 42.2%, and the year-on-year growth rates of 21h1 and H2 revenue were 28.4% and 4.2% respectively. In terms of direct marketing channels, the revenue in 2021 was 1.4 billion yuan, a year-on-year decrease of 3.1%, accounting for 9.1%, and the year-on-year growth rates of 21h1 and H2 revenue were 21.5% and - 18.6% respectively. In terms of franchise channels, the revenue in 2021 was 6.82 billion yuan, with a year-on-year increase of 8.2%, accounting for 44.6%, and the year-on-year growth rates of 21h1 and H2 revenue were 25.5% and - 1.2% respectively. In terms of joint venture channels, the revenue in 2021 was 621 million yuan, a year-on-year increase of 42.5%, accounting for 4.1%. In terms of stores, as of the end of the year, the number of directly operated, franchised and affiliated stores of the company was 781, 7412 and 374 respectively, with a net increase of 100, 281 and 23 respectively compared with the beginning of the year; Compared with the beginning of the period, the company's leisure clothing stores decreased by 268 to 2823, and children's clothing stores increased by 110 to 5744. In 2021, the company focused on the improvement of the retail capacity and operation quality of offline stores and further optimized the number of offline channels by revitalizing the image of stores, optimizing goods display and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) sales integration.
The profitability of all categories and channels was improved, and the inventory increased in winter. In terms of profitability, excluding the impact of French business, the company's gross profit margin in 2021 was 42.58%, with a year-on-year increase of 3.67pct, including 40.13% / + 4.25pct of casual clothing, 43.74% / + 3.06pct of children's clothing, 37.36% / + 5.21pct of online channels, 66.45% / + 7.78pct of direct channels and 40.01% / + 1.23pct of franchise channels. In terms of expense rate, the company's sales, management, R & D and financial expense rates were 21.9%, 4.0%, 2.1% and - 0.7% respectively, with year-on-year changes of - 0.1, - 1.4, + 0.1 and - 0.2pct. In 2021, the company's net profit margin increased by 4.4pct to 9.6% year-on-year. In terms of inventory, by the end of the year, the company's inventory was 4.024 billion yuan, a year-on-year increase of 60.9%, and the inventory turnover days were 133 days, basically the same as that of the previous year. In terms of cash flow, the net cash flow from operating activities of the company in 2021 was 2.08 billion yuan, a year-on-year decrease of 53.4%, which was due to the increase in goods procurement and tax payment in the current period.
Investment suggestion: disturbed by external factors, the company's revenue and performance were under pressure in the second half of the year, the children's wear business and online channels performed steadily, and the company's profitability improved significantly. We are optimistic that the market share of the company's children's wear business will continue to increase, and the transformation of casual clothing is worth looking forward to. It is estimated that the net profit attributable to the parent company in 20222024 will be RMB 1.678 billion, RMB 1.908 billion and RMB 2.160 billion respectively, and the closing price on March 30 corresponds to about 11 times of the company's PE (22e), Maintain the "Buy-A" recommendation.
Risk warning: repeated outbreaks in China; The transformation of casual wear is less than expected; Market competition intensifies.
