\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 690 Haier Smart Home Co.Ltd(600690) )
Event:
On March 30, 2022, Haier Smart Home Co.Ltd(600690) released the annual report of 2021. In 2021, the company achieved an operating revenue of 227556 billion yuan (+ 8.50%), with a year-on-year increase of 15.8% after excluding the impact of disposal business; The net profit attributable to the parent company was 13.067 billion yuan (+ 47.10%). In 2021q4, the company achieved a revenue of 57.593 billion yuan (+ 4.12%) and a net profit attributable to the parent company of 3.132 billion yuan (+ 21.60%).
Key investment points:
China’s diversified products continue to grow in large quantities, and remarkable achievements have been made in overseas layout. 1) China: in 2021, China’s smart home business achieved a revenue of 120791 billion yuan (+ 22.2%) and an operating profit of 7.456 billion yuan (+ 27.5%). By business, the refrigerator / kitchen / washing machine / air conditioner / water appliance business achieved a revenue growth rate of 21.4% / 26.1% / 18.0% / 26.2% / 24.3%, and the Wuxi Online Offline Communication Information Technology Co.Ltd(300959) share increased steadily. 2) Overseas: in 2021, the company’s overseas revenue and profitability reached a new high, with a revenue of 113725 billion yuan (+ 13.0%), an operating profit of 5.926 billion yuan (+ 48.1%), and an operating profit margin of 5.2%, an increase of 1.2pct compared with 2020. In terms of subregions, North America / Europe / Australia and New Zealand / South Asia / Southeast Asia / Japan achieved a revenue growth rate of 10.3% / 19.5% / 17.3% / 30.5% / 15.0% / – 3.4% (under the yen caliber, the revenue growth rate in Japan is 6.3%).
In 2021q4, the gross profit margin remained stable and the net profit margin attributable to the parent company increased. 1) The gross profit margin of 2021q4 was 34.27%, down 0.1pct from 2020q4, basically flat. Facing the challenge of rising prices of raw materials, the company digested the cost pressure by increasing the proportion of high-end products and optimizing the product structure. 2) The net interest rate attributable to the parent company of 2021q4 was 5.44%, which was 0.78pct higher than that of 2020q4. Focusing on the market and supply chain, the company continues to promote the whole process digital reform and improve operation efficiency. The ratio of sales expense / management expense of 2021q4 company was 18.15% / 5.01%, a decrease of 0.43/0.36pct compared with the same period in 2020.
High end trend + new category expansion promote the growth of the company’s revenue. Relying on advanced technology and development advantages, the company’s high-end brands bring differentiated product experience, amplify single user value and maintain a rapid growth trend. In the Chinese market, Casati’s sales revenue exceeded 10 billion yuan in 2021, reaching 12.9 billion yuan, a year-on-year increase of more than 40%, ranking first in the high-end market share of refrigerators, washing machines and air conditioners; In the US market, the revenue growth of high terminal brand Monogram / caf é / GE Profile exceeded 40%. The company closely follows the development trend of the industry and attaches importance to the introduction of new categories. In 2021, the revenue growth of clothes dryer / dishwasher will reach 203% / 90%. At the end of 2021, the company announced the investment plan of the small household appliances division to increase investment in emerging household appliances, such as clean household appliances. The layout of new categories may bring new growth impetus to the company.
Repurchased shares are used for equity incentive to help the company’s long-term development. On March 31, 2022, the company announced that it planned to buy back A-Shares of the company with no less than 1.5 billion yuan and no more than 3 billion yuan, and the repurchase price would not exceed 35 yuan / share. It is estimated that the upper limit of the number of shares to be repurchased would be 85.71 million shares, accounting for about 0.91% of the total share capital of the company. The company’s share repurchase is used to implement equity incentive, bind the interests of the company and the management team, give play to the incentive and restraint effect, and contribute to the realization of the company’s long-term business objectives.
China’s foreign business grew steadily, the category was high-end and diversified, and the operation efficiency was improved. It was covered for the first time and was rated “buy”. The company is a leading household electrical appliance enterprise in the world. China has a large number of categories and overseas markets. The company uses high-end brands to enhance single user value, expand new categories, expand income generation, and improve operation efficiency through digital reform. For the first time, give a “buy” rating. We predict that from 2022 to 2024, the net profit attributable to the parent company will be RMB 151.15/174.06/19.562 billion, the corresponding EPS will be RMB 1.61/1.85/2.08, and the corresponding PE of the current stock price will be 14.36/12.47/11.10 times.
Risk tips: repeated covid-19 epidemic, intensified industry competition, tight shipping capacity, exchange rate fluctuations, new category growth is less than expected, etc.
