\u3000\u30 Fawer Automotive Parts Limited Company(000030) 11 Zhejiang Walrus New Material Co.Ltd(003011) )
Key investment points
Performance summary: the company released the annual report of 2021, and achieved revenue of 1.8 billion yuan (+ 46.9%) in 2021; The net profit attributable to the parent company is 100 million yuan (- 48.5%); The net profit deducted from non parent company is 100 million yuan (- 43.2%). Among them, Q4 company achieved an operating revenue of 500 million yuan (+ 60.3%) in 2021; The net profit attributable to the parent company was RMB 2004 million (- 50.9%); The net profit deducted from non parent company was 18.89 million yuan (- 39.8%). On the whole, the company achieved rapid growth in annual revenue in 2021, and its performance was temporarily under pressure due to the sharp rise in raw materials.
The rising price of raw materials suppressed the gross profit margin and improved cost control. In 2021, the company's overall gross profit margin was 16.7% (- 13pp), mainly due to the sharp rise in raw materials. Among them, the average price of PVC and wear-resistant layer in 2021 increased by 38.4% and 34.4% respectively compared with the average price of the previous year. Among them, in 2021, the company's SPC floor gross profit margin was 17.2% (- 11.8pp), LVT floor gross profit margin was 16.4% (- 15.8pp), and WPC floor gross profit margin was 13.3% (- 17.5pp). In terms of expense rate, the overall rate of the company in 2021 is 12.3% (- 4.3pp). Among them, the company's sales expense ratio was 6.7% (- 1.9pp). As part of the company's exhibition, export fees and sales commissions were transferred to operating costs, the sales expense decreased by 40.8% year-on-year; The management fee rate is 1.9% (- 0.3pp), which is mainly due to the decrease of the company's intermediary service fee; The R & D expense rate was 2.7% (- 0.3pp). In order to improve the market competitiveness of products, the company continued to increase R & D investment and increase the salary of employees in relevant departments, resulting in a year-on-year increase of 30.1% in R & D expenses; The financial expense ratio was 1% (- 1.8pp), which was mainly due to the decrease of exchange loss, and the financial expense decreased by 47.5% year-on-year. Overall, the company's net interest rate was 5.4%, a year-on-year decrease of 10pp. In addition, at the end of 2021, the company's inventory was 420 million yuan, with a year-on-year increase of 60.8%, mainly due to the expansion of the company's business scale, superimposed by the shortage of shipping and the extension of delivery cycle; Accounts receivable amounted to 320 million yuan (+ 102.5%), mainly due to the optimization of the company's customer structure and the increase in the proportion of major customers with long accounting period. In 2021, the company's net operating cash outflow was 110 million yuan, of which Q4 operating cash flow became positive, which was a net inflow of 100 million yuan.
The market competitiveness of SPC flooring has been verified, and the revenue has achieved rapid growth. In terms of products, the company's SPC floor achieved a revenue of 1.33 billion yuan in 2021, with a year-on-year increase of 57.1%, accounting for 74% from 69.2% in 2020. With good dimensional stability and impact resistance, SPC floor is widely used in various types of floor decoration such as home decoration, commercial and public areas, and has gradually become the PVC floor product with the largest demand of the company in recent years; LVT flooring achieved a revenue of 240 million yuan, a year-on-year increase of 26.6%; WPC flooring achieved a revenue of 210 million yuan, with a year-on-year increase of 18.9%. As some LVT flooring and WPC flooring have been gradually replaced by SPC flooring with similar specifications, the growth rate of LVT and WPC flooring is lower than that of SPC products. In 2021, the company will continue to carry out product, process and technological innovation to meet the needs of customers for high-quality and multi-functional products; At the same time, the company has strengthened the construction of its own brand and gradually expanded its product line on the basis of the existing flooring to enhance its core competitiveness. It is expected that in the future, with the increasing maturity of PVC flooring industry, the market will gradually focus on specialization. With strong brand influence and extensive market popularity, the company's revenue scale is expected to continue to expand, and the scale effect will gradually appear.
The number of new customers continued to increase and the customer structure was further optimized. The company has established good cooperative relations with international well-known flooring brands and building materials retailers such as kingfisher, beaulieucanada, engineeredfloors and hornbach. In 2021, the sales of the company's top five customers accounted for 34.5% (the former value was 37.1%), and the concentration of key customers decreased, mainly due to the rapid growth of new customer orders and the further optimization of customer structure. In terms of production capacity, the company's 800 cabinet production capacity of China's old factory and 650 cabinet production capacity of Vietnam's first and second factories have basically reached full capacity, and the orders are relatively saturated. The production capacity infrastructure of Vietnam's third factory and China's raised investment project of 20 million square meters of PVC flooring is under normal progress, and the equipment installation and production are expected to be completed and put into operation within the year. The company's new production capacity mainly supplies the demand for new customer orders. It is expected that the large volume of new customer orders will further promote the company's revenue scale.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 2.43 yuan, 3.76 yuan and 5.39 yuan respectively, and the corresponding PE will be 10 times, 7 times and 5 times respectively. The "hold" rating will be given for the first time.
Risk tip: the risk of sharp fluctuations in raw material prices, the risk of intensified Sino US trade friction, the risk that the decline of sea freight is less than expected, and the risk that the progress of production capacity is less than expected.
