\u3000\u3 Shengda Resources Co.Ltd(000603) 877 Ningbo Peacebird Fashion Co.Ltd(603877) )
The annual revenue growth slowed down due to the impact of 2021q4 retail decline and expense side, maintaining the “buy” rating
In 2021, the company achieved revenue of 10.921 billion yuan (+ 16.34%), net profit attributable to the parent company of 677 million yuan (- 4.99%), net profit deducted from non net profit of 520 million yuan (- 7.26%), and the performance was basically in line with expectations. The decline in profit was mainly caused by the decline in retail performance in 2021q4 and the sharp increase in expenses (amortization of headquarters building / publicity advertising / digital transformation). Considering the impact of the epidemic in 2022 on the retail environment, we lowered the profit forecast for 20222023 and added a new profit forecast for 2024. It is expected that the net profit attributable to the parent company in 20222024 will be RMB 810 / 9.7 / 1.12 billion (compared with RMB 820 / 980 million in 20222023), the corresponding EPS will be RMB 1.7 / 2.0 / 2.3 respectively, and the current share price will be 12.4 / 10.5 / 9.1 times that of PE respectively. It is expected that the profit will improve under the expansion of franchise stores and the improvement of operation efficiency, and the “buy” rating will continue to be maintained.
Brand side: major brands support the growth of the whole year, and will continue to expand the national fashion product line in 2022
In 2021, the income of women’s wear / men’s wear / leting / mini peace was 44.8/33.7/13.98/1.27 billion yuan respectively, with an increase of 18.6% / 19.0% / 5.2% / 29.5%, accounting for 41.4% / 31.1% / 12.9% / 11.8%. In 2021, men’s / women’s clothing will expand the national fashion product line Taiping youth / super China. At present, Taiping youth has carried out the pilot of independent direct stores in Shenzhen / Ningbo and other places. It is expected to increase the investment in Taiping youth design resources and retail in 2022.
Channel side: Online growth has slowed down slightly, direct channels have significantly improved efficiency, and franchise store expansion has reached a new high
2021 tiktok income was 3 billion 364 million yuan (+19.9%), the online growth rate was 21.28% in 2020, accounting for 31.1%, and the online growth rate slowed slightly. The main channel was Ali channel control discount, which led to a year-on-year decline. But the channel of trembling channel made a significant breakthrough in 2021. Ali: trembling: vip.com: Jingdong, tiktok and other retail channels accounted for =5:2:2:1. The offline revenue was 7.467 billion yuan (+ 17%), of which the direct / franchise revenue was 4.614 billion yuan, an increase of 13.2% / 23.6%, accounting for 61.8% / 38.2% (+ 2.2pct), and the direct same store increased by 6% – 8%. The number of stores: in 2021, there were 598 to 5214 net expansion stores, 62 / 536 direct sales / franchises respectively, and the number of franchised net expansion stores reached a new high. The company plans to have Tus-Design Group Co.Ltd(300500) net expansion stores in the franchise channel in 2022.
The expense side dragged down the annual net interest rate by 1.4pct, and the operating capacity remained in good condition
Profitability: in 2021, the gross profit margin was 52.9% (+ 0.4pct), and the gross profit margin of online / direct / franchise was + 1.9 / + 0.1 / – 2.4pct respectively year-on-year. The decline of franchise gross profit margin was mainly due to the increase of the proportion of old goods with low discount and the increase of store expansion subsidies; In 2021, the ratio of sales / management / Finance / R & D expenses was 36.2% / 6.5% / 0.6% / 1.4% respectively, with a year-on-year increase of + 1.3 / + 0.36 / + 0.15 / + 0.42pct, and the net interest rate decreased by 6.2% (- 1.4pct), mainly due to the increase of one-time expenses. Operating capacity: at the end of 2021, the inventory was 2.54 billion yuan (+ 12.6%), and the inventory turnover days were 168 days (+ 2 days); Accounts receivable are 630 million yuan (- 18.8%), and the turnover days of accounts receivable are 23 days (- 4 days).
Risk tip: the epidemic repeatedly affects retail and channel adjustment is less than expected.
