\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Event overview
In 2021, the company’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 17.47027682761 billion respectively, with a year-on-year increase of 25.40% / 47.34% / 47.21%. Excluding the impact of exchange rate changes, the revenue / net profit attributable to the parent company increased by 34.09% / 57.55% year-on-year, which is in line with the performance forecast. 21q4 revenue / net profit attributable to the parent company were RMB 4.835 billion / 771 million respectively, with a year-on-year increase of 33% / 37%. The month on month acceleration and Q4 net interest rate reached the highest level in the year. The company distributed a cash dividend of 1.1 yuan per share, with a dividend rate of 46% and a dividend rate of 1.5%.
Analysis and judgment:
The volume / price increased by 29% / – 3% respectively. Excluding the impact of exchange rate, the unit price increased by 4.5%. (1) In terms of component price, according to the announcement, the company sold 210 million pairs of sports shoes in 2021, an increase of 50 million pairs, with a year-on-year increase of 29.46%, mainly due to the improvement of the production capacity of the original factory (additional plant construction, purchase of plant, etc.) and the production and climbing of three new factories in Vietnam. In 2021, the total capacity of the company was 21800 pairs, with a year-on-year increase of 21%, and the capacity utilization rate was 96%, with a year-on-year increase of 5pct. We calculated that the average unit price of the company’s sports shoes decreased by 3% year-on-year in 21 years, excluding the impact of exchange rate, and the unit price increased by 4.5% year-on-year. Our analysis mainly comes from the impact of customer structure. (2) In terms of customers, the top five customers accounted for 91.65% in 2021, with a year-on-year decrease of 3PCT. We estimate that Nik e, Deckers and UA maintained high growth, puma maintained rapid growth and VF was relatively stable. (3) Sports and leisure shoes / outdoor boots / sports sandals and other revenues increased by 26% / 6% / 47% and accounted for 82% / 9% / 9% respectively. According to our analysis, the rapid growth of sandals and high gross profit margin are mainly from the contribution of ugg wool sandals.
2q4 gross profit margin decreased by 0.9pct month on month, mainly affected by the rise in the price of raw materials. In 2021, the gross profit margin was 27.23% respectively, with a year-on-year increase of 3.35pct. We analyzed that the increase in gross profit margin was mainly due to the improvement of capacity utilization and the continuous optimization of customer structure; The gross profit margin of 21q4 was 25.56%, increased by 1.97 PCT year-on-year and decreased by 0.9 PCT month on month. We analyzed that it was mainly affected by the price rise of raw materials. In addition, the customs declaration fee was adjusted from sales expense to cost. In terms of products, the gross profit margins of sports and leisure shoes / outdoor boots / sports sandals and others were 28.88% / 18.66% / 20.52% respectively, with a year-on-year increase of 3.44/1.50/4.89pct.
The increase of net profit rate is contributed by the increase of gross profit rate and the decrease of financial expense rate. The income tax rate is increased by the dividends of overseas subsidiaries. In 2021, the net interest rate was 15.84%, a year-on-year increase of 2.23pct, and the net interest rate of 21q4 was 15.94%, a year-on-year increase of 0.5pct, which was flat month on month. In terms of cost rate, the company’s sales / management / Finance / R & D cost rate in 2021 was 0.37% / 3.93% / – 0.26% / 1.34% respectively, with a year-on-year decrease of 0.09/0.32/0.7/0.16pct. The decrease in financial cost rate was mainly due to the large-scale loan restructuring in 2020, the decrease in interest expense of related loans in 2021, and the increase in interest income and exchange income due to the arrival of raised funds. It is worth noting that the adjustment of customs declaration expenses from sales expenses to costs makes the sales expenses of 21q4 negative. The income tax rate was 24.9%, a year-on-year increase of 6.6pct, mainly due to the dividends of overseas subsidiaries.
The growth of accounts receivable is affected by the low base. In 2021, the company’s accounts receivable / accounts payable were RMB 2.487 billion / 1.814 billion respectively, with a year-on-year increase of 40.55% / 38.76%. The increase in accounts receivable was mainly due to the impact of the epidemic in 20 years. Some customers paid in advance through supply chain finance, resulting in a low base. The turnover days of accounts receivable / accounts payable were 44 / 44 days respectively, with a year-on-year decrease of 8 / 4 days.
Investment advice
In the short term, (1) the contribution of 22 years’ production capacity comes from the continuous contribution of the climbing of three Vietnamese factories and the transformation of old factories in 21 years. The second phase of the Vietnamese factory has started construction, and the Indonesian factory will be put into operation at the end of 22 years and contribute to the increment in 23 years. We expect the sales volume to increase by more than 40 million pairs in 22 years; (2) Nike China has a poor performance and has a certain impact on the supply chain, but we judge that the company still has room to increase its share and has little impact; In addition, Puma is optimistic about its own operation, and the new brands onrunning, ASICs and NewBalance are still expected to contribute to rapid growth, and the unit price growth in 22 years is expected to be higher. (3) We judge that although most of the company’s raw materials are locked by brands, there is still some pressure on the gross profit margin under the impact of the epidemic in Vietnam and the increase in freight prices, but the income tax rate is expected to decline, so the net profit margin is expected to decline steadily and slightly.
In the medium term, the company’s share in Nike is expected to increase from 4% to 14%, and is expected to continue to sign new brands and brand optimization; In the long run, the OEM concentration of sports shoes is expected to be higher than that of clothing. The company’s production expansion progress is faster than that of its peers, and is expected to surpass Yuyuan and become the largest supplier in the world.
Considering that the income in the 21st year is slightly lower than our previous expectation due to the impact of exchange rate, the income forecast for the 22nd / 23rd year is lowered from 23.1/28.1 billion yuan to 21.8/25.9 billion yuan, the new 24-year income is 30.1 billion yuan, the net profit forecast for parent company is lowered from 3.663/4.579 billion yuan to 3.388/4.082 billion yuan, the new 24-year income is 4.771 billion yuan, the corresponding EPS is lowered from 3.14/3.92 yuan to 2.9/3.5 yuan, and the new 24-year EPS is 409 yuan, 202. On April 7, 2002, the closing price was 71.78 yuan, and the corresponding PE valuation was 25 / 21 / 18x respectively, maintaining the “buy” rating.
Risk tips
The uncertainty of the epidemic development in Vietnam; The risk of lifting the ban on restricted shares; Risk of Indonesian plant construction schedule; Systemic risk.