\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 828 Red Star Macalline Group Corporation Ltd(601828) )
Event:
The company released its performance in 2021 and achieved an operating revenue of 15.513 billion yuan in 2021, with a year-on-year increase of 8.97%; The net profit attributable to the parent company was 2.047 billion yuan, a year-on-year increase of 18.31%; The net profit deducted from non parent company was 1.658 billion yuan, with a year-on-year increase of 42.62%, and the overall performance was in line with expectations.
The revenue of the self operated sector increased rapidly, and the entrusted shopping malls accelerated the penetration of sinking channels
By the end of 2021, the company had 95 self operated shopping malls, 278 entrusted shopping malls, 10 home shopping malls and 69 franchised home building materials projects through strategic cooperation, including 485 home building materials stores / industrial streets. In terms of self operated business, three self operated shopping malls were added throughout the year, with a total operating area of 8.455 million square meters and a revenue of 8.09 billion yuan, with a year-on-year increase of 21.1%. Benefiting from the upgrading of three stores and the landing of nine theme pavilions, the overall operating efficiency improved significantly, with a rental rate of 94.1%, a year-on-year increase of 2.0 PCT, a year-on-year increase of 0.7 PCT compared with 2019, and the same store growth rate of mature self operated shopping malls was 16.8%. In terms of entrusted management business, 20 entrusted shopping malls were added throughout the year, with a total operating area of 13.848 million square meters and a rental rate of 91.4%, an increase of 0.7 PCT year-on-year. Among them, the operating area of entrusted shopping malls in third tier and below cities accounted for about 70%, and the entrusted shopping malls helped the company fill the vacancy and accelerate the sinking; By the end of 2021, 327 contracted projects have obtained land use rights / plots among the entrusted shopping malls prepared by the company, and the number of entrusted shopping malls in the preparation of third tier and below cities accounts for more than 70%, providing guarantee for the company to penetrate the sinking market in the light asset entrusted management mode in the future.
The effect of reducing leverage is remarkable, and the operating cash flow is a new high in recent three years
In terms of financial leverage, the company firmly implemented the “leverage reduction” strategy and optimized the asset structure. In 2021, the company’s asset liability ratio was 57.4%, a year-on-year decrease of – 3.7pct, the scale of interest bearing liabilities decreased by 6.3 billion to 39.1 billion yuan, the net cash flow from operating activities was 5.38 billion yuan, a year-on-year increase of 29.4%, an increase of 31.4% compared with 2019, significantly catching up with the level before the epidemic, the capital expenditure decreased significantly, and the operating cash flow reached the highest point in three years.
Investment advice and profit forecast
We are optimistic about the company as the leader of chain home stores. On the one hand, we will deepen the main store business and improve the operation efficiency of stock stores while accelerating the penetration into low-level cities. On the other hand, we will actively promote the expansion business, actively explore the stock market of home decoration business, actively explore the integration of home decoration and home Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration, and build a comprehensive and multi-channel Pan home ecosystem, We estimate that the net profit attributable to the parent company from 2022 to 2024 will be RMB 2753 / 34.50 / 3.807 billion respectively, and its corresponding EPS will be RMB 0.63/0.79/0.87 respectively. At present, the corresponding PE of the stock price is 13 / 10 / 9 times, maintaining the “buy” rating.
Risk tips
The company’s digitization and new retail transformation are less than expected, the expansion of entrusted shopping malls is less than expected, and the fluctuation of the real estate market affects the risk of the home industry
