\u3000\u30 China Baoan Group Co.Ltd(000009) 21 Hisense Home Appliances Group Co.Ltd(000921) )
Core view
In 2021, the revenue increased sharply, but the profit was under pressure. The company’s 2021 revenue is + 40% to 67.6 billion yuan, the net profit attributable to the parent is – 38% to 970 million yuan, the deduction of non profit is – 39% to 670 million yuan, and the profit excluding the impact of the acquisition of Sandian is – 29% to 1.13 billion yuan. 2021q4 revenue + 29% to 17.5 billion yuan, net profit attributable to parent company – 92% to 50 million yuan.
The home appliance business is greatly negatively affected by raw materials. In the 40% growth of the company’s household appliance revenue in 2021, the central air conditioner, household air conditioner and ice washing were + 38%, 19% and 23% respectively. Hitachi central air conditioner still achieved an increase in share under the superposition of brand advantages due to the high prosperity of the industry. On the one hand, household appliances benefited from the export pull, on the other hand, the domestic market share also achieved a steady growth in the contribution of volume price balance. However, due to the upward pressure on the cost of raw materials, the gross profit margin of air conditioning and ice washing decreased by 3.7 and 4.8pct to 26.3% and 16.7% respectively. Among them, the central air conditioning still maintained high-quality profitability. Hitachi’s consolidated net profit was about 1.2 billion yuan, and the net profit margin decreased slightly to 13% compared with the same period; Excluding the impact of Hitachi and three power meter consolidation, the loss of traditional household and other businesses is expected to be about 60 million. On the whole, on the basis of the pressure on gross profit margin, the company reduced the negative impact through cost efficiency optimization (the sales expense rate decreased by 2.9pct, and the management / R & D / financial expense rate increased slightly by 0.7 / 0.3 / 0.3pct).
The integration of new energy business is promoted, and the cost side efficiency is expected to significantly narrow the loss. After Hisense Home Appliances Group Co.Ltd(000921) completed the acquisition of Sandian holdings at the end of May, strong measures were taken for the management, management system, merger of subsidiaries, improvement of labor efficiency and other aspects of Sandian holdings, and the restructuring and reform was steadily and rapidly promoted.
In 2021q2-q4, the revenue side of the three power companies achieved a high recovery growth of 27%, of which the auto parts and systems business achieved a high growth of 53% and 64% in the U.S. and Asian markets (China’s caliber is the revenue of 2021, and if Q1 revenue is excluded, the growth rate in Asia will be slower than the disclosure caliber). Europe and Japan increased by 3% and decreased by 2% respectively. However, due to the impact of raw materials and supply chain, the operating profit decreased by 29% year-on-year, and the consolidated loss to Hisense was about 160 million yuan. Based on the efficiency improvement measures after the restructuring, Sandian expects to maintain the growth of automobile business revenue of 3% to 158.8 billion yen (about 8.3 billion yuan) in 2022. At the same time, with the continuous optimization of the cost side, the expected loss in 2022 will be significantly reduced by 76% to – 5 billion yen (about 260 million yuan).
The quality of assets and operations remains high. Under the pressure of the industry, the company’s receivable and inventory turnover days increased slightly by 3 days and 7 days. The cash balance on hand was basically flat at 7 billion year-on-year, and the overall operation remained healthy. In addition, the growth of inventory and receivable balance mainly comes from the consolidation of three electricity meters. With the further integration and efficiency improvement of supply chain and efficiency after Hisense takes the lead, the turnover efficiency is expected to be further enhanced.
Risk tip: the expansion of new energy business is less than expected, and the progress of three power integration and loss recovery is less than expected. Investment suggestion: considering that JiaKong is affected by raw materials and that Sandian is affected by one-time drag such as impairment, reduce the profit forecast and maintain the “buy” rating.
It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.42 billion, RMB 1.85 billion and RMB 2.22 billion (the value before 202223 is RMB 1.74 billion and RMB 2.09 billion), with a year-on-year growth rate of 46%, 30% and 20%; Diluted EPS = 1.04, 1.36 and 1.63 yuan, and the current share price corresponds to PE = 11, 8 and 7 times. Maintain the “buy” rating.
