\u3000\u3 China Vanke Co.Ltd(000002) 508 Hangzhou Robam Appliances Co.Ltd(002508) )
Investment logic
High end brand strength and fine channels are the cornerstone of the company’s development: the company continues to build high-end brand strength, maintains the sales expense rate of more than 25%, adheres to the positioning of high-end kitchen appliances, and has outstanding brand strength. At the same time, the company continues to diversify its channel structure and inject new vitality into the company. At present, it has been expanded to a diversified channel structure system including offline retail channels, e-commerce channels, engineering channels and innovation channels. Extensive channels and fine management, laying a solid foundation for the development of the company;
Cigarette stoves are the cornerstone, and the growth of new categories can be expected: the share of the company’s advantageous category cigarette stoves remains in the lead, and the share of offline sales in 2021 is 30.6% / 29.3% respectively. It has successively grasped the market demand, made great efforts to grow new categories, and dishwashers are mainly Chinese characteristics. The dishwashers of 21h1 company achieved a revenue of 170 million yuan, a year-on-year increase of + 148%, accounting for 4% of the revenue, an increase of 2pct year-on-year; In 22 years, the main brand will launch an integrated stove category, which is expected to help the revenue growth again.
Release the impairment risk and go into battle with light gear: according to the performance express, the net profit attributable to the parent company of 2021q4 is – 10 million yuan. Q4 performance loss is mainly affected by the provision for bad debts. The company estimates that the total provision for Q4 in 2021 is about 710 million yuan, including about 630 million yuan for Evergrande group and its member enterprises and 80 million yuan for other customers. So far, all bad debts related to Evergrande group have been withdrawn, and the impairment risk has been released. In the follow-up development of Engineering channels, the company will also take the initiative to adjust the customer structure, seek more cooperation with state-owned real estate enterprises and small and medium-sized real estate developers, reduce the business risks caused by the dependence of large customers, and promote the increase of gross profit margin at the same time. The adjustment of customer structure will help the sound development of the company’s engineering channels.
Investment advice & profit forecast
The company has released the performance express for 2021, realizing a revenue of 101500 million yuan, a year-on-year increase of + 24.8%, and the net profit attributable to the parent company was 13.5% 300 million yuan, a year-on-year increase of – 19.7%; In 2021, the company’s revenue exceeded 10 billion for the first time, and its leading position was stable. We estimate that the company’s revenue from 2021 to 2023 will be 10.15 billion yuan, 11.92 billion yuan and 14.01 billion yuan respectively, with a year-on-year increase of 24.8%, 17.5% and 17.5% respectively. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 1.34 billion yuan, 2.16 billion yuan and 2.62 billion yuan respectively, with a year-on-year increase of – 19.7%, + 62.2% and + 20.9% respectively. The current share price corresponds to PE from 2021 to 2023, which are 22x, 13X and 11x respectively. We select Vatti Corporation Limited(002035) and integrated stove enterprises as comparable companies. The median PE of comparable companies in 2022 is 9 times, giving the company a valuation of 15 times in 2022, corresponding to the target price of 34.20 yuan. It is covered for the first time and rated as “overweight”.
Risk
Risk of slowdown in real estate growth; Risk of rising raw material prices; New category expansion is less than expected risk.
