\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Events
The company released its performance in 2021 on April 7, realizing a revenue of 17.47 billion yuan, an increase of 25.4% (excluding the impact of exchange rate, an increase of 34.1%); The net profit attributable to the parent company was 2.768 billion yuan, an increase of 47.3% (excluding the exchange rate, an increase of 57.6%), which was in line with previous expectations. Among them, 4q21 achieved a revenue of 4.835 billion yuan (+ 33.5%) and a net profit attributable to the parent company of 771 million yuan (+ 37.4%), both revenue and net profit increased month on month.
Performance review
External fluctuations remain unchanged, strong growth and significant improvement in human efficiency. Sub customers: the revenue of the top five customers Nike / Deckers / VF / puma / UA increased by 43.7% / 57.8% / 13.4% / 26.1% / 44.9% (USD caliber) respectively, and the new customers ASICs, on and NewBalance have been mass produced and shipped. Despite the epidemic situation and fluctuations in international brand sales, the company still achieved strong growth, reflecting prominent barriers and steady increase in share. Category: sports and leisure increased by 34.7%, sandals and slippers increased by 56.8% driven by ugg wool slippers, and outdoor boots and shoes increased by 13.5%. Price by volume: the annual shipment volume was 210 million pairs (+ 29.46%), and ASP increased by about 4.5%; The number of employees increased by about 22.8% to 151000, slower than the increase in output, reflecting the improvement of human efficiency.
Profitability improved month on month and remained at a high level. The gross profit margin / net profit margin of the company in 21 years were 27.23% (+ 3.36pct) / 15.84% (+ 2.36pct) respectively, of which the gross profit margin and net profit margin of 4q21 increased to 27.7% / 15.94% month on month. The company’s profitability is expected to continue to maintain a high level due to the inclination of orders from high-quality customers, price locking to hedge the impact of rising raw material costs, scale effect and stable operation.
The impact of short-term shutdown is not likely, and the long-term production expansion plan is clear. Considering that the first quarter is the off-season of production, and the attendance and production rhythm of employees have returned to normal, the impact of the epidemic on the company’s annual performance is expected to be limited. In the long run, three new plants put into operation in Vietnam in 21 years will continue to climb the slope and improve efficiency, and are expected to reach production capacity one after another; Indonesia’s phase I plant is expected to be put into operation in 22 years and contribute to production capacity in 23 years. The overall growth rate is optimistic.
Investment suggestions and risk tips
Investment suggestion: continue to be optimistic about the continuous growth of customer orders and structural optimization under the high boom track on the demand side; The supply side capacity expansion superimposed on the sharp rise in capacity utilization, driving performance growth. Considering the company’s full orders and optimistic expectation of capacity expansion, the profit forecast for 22-23 years and new 24 years is raised. The net profit attributable to the parent company in 22-24 years is expected to be 35.23 (up 5%) / 44.05 (up 6%) / 5.352 billion yuan, corresponding to 24 / 19 / 16 times of PE, maintaining the “buy” rating.
Risk tips: Vietnam’s rising labor costs, exchange rate fluctuations, continued spread of overseas epidemics, etc.
