\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Key investment points
Event: the company released its 2021 annual report. The annual revenue was 17.47 billion (+ 25.4%, excluding exchange rate + 34.1%), the net profit attributable to the parent company was 2.77 billion (+ 47.3%, excluding exchange rate + 57.6%), and the net interest rate was 15.8% (+ 2.3pp); In Q4, the revenue was 4.84 billion (+ 33.5%), the net profit attributable to the parent company was 770 million (+ 37.4%), and the net interest rate was 15.9% (+ 0.4pp).
Nike and Deckers led the growth rate, and high-quality customer orders drove both volume and price. In the first 21 years, the top five customers contributed 91.6% of Huali's revenue, and the revenue of sub group customers: nike61.5% RMB 800 million (excluding exchange rate + 44%), deckers37 RMB 600 million (excluding exchange rate + 58%), vf32.5% 100 million yuan (excluding exchange rate + 13%), puma18.5% 900 million yuan (excluding exchange rate + 26%), ua9.9% 600 million yuan (excluding the exchange rate + 45%), the deepening cooperation with Nike and the rapid growth of Deckers, onrunning and other brands with high unit price have driven the company's order volume and price to rise at the same time, with the sales volume of 211 million pairs (+ 29.5%) in 21 years and USD ASP increasing by 4.5%.
In terms of single brands, Hoka, Nike, ugg and puma brands have the strongest growth rate. The upward proportion of high-quality large customer orders has helped the company further give play to its scale effect. The company's annual gross profit margin is 27.2% (comparable caliber + 3.5pp), the annual net profit margin is 15.8% (+ 2.3pp), Q4 profitability continues to improve month on month compared with Q3, and the single quarter net profit margin reaches 15.94%.
Vietnam's new factory climbing + old factory expansion contribute to the capacity increment, and the leading position is becoming more and more stable. In 21 years, the company produced 210 million pairs (+ 27.8%). In 22 years, the company's capacity expansion in North Vietnam was mainly through the capacity climbing, old plant expansion and efficiency improvement of three plants in Weilin, Yongshan and Hongxin, Vietnam. From the end of 2022, it is expected that phase 1 of the Indonesian plant will also be put into operation, and the capacity reserves in North Vietnam and Indonesia are sufficient. From the current order receiving situation, Huali's production capacity has become a high-quality resource that major brands are competing to seize. It has successively received orders from customers for 5 or even 8 years, which fully shows that the company has been fully recognized by customers.
Profit forecast and Valuation: as a global leader in sports shoe manufacturing, the demand for sports fashion and jogging shoes that Huali is good at is growing vigorously. Huali itself has a very outstanding reputation for quality and delivery date. Under the epidemic situation, there is still considerable progress in production expansion, which has become a solid backing for a small number of large customers to undertake the continuous growth ambition, The industry pattern of short supply is expected to enable Huali, which is still in the expansion cycle, to benefit from the double growth of orders and unit price. It is expected that in 22 / 23 / 24, the company's revenue will be 21.7/266313 billion yuan, with a year-on-year increase of 24% / 22% / 18%, and the net profit will reach 3.54/43.3/5.12 billion yuan, with a year-on-year increase of 28% / 23% / 18%. The corresponding valuation is 27 / 22 / 19x. The company's manufacturing barriers in sports shoe track are prominent, the growth path is clear, and the orders are abundant, maintaining the "buy" rating.
Risk tip: the epidemic situation in northern Vietnam affects recruitment, and the labor cost or raw material cost rises unexpectedly
