\u3000\u3 China Vanke Co.Ltd(000002) 677 Zhejiang Meida Industrial Co.Ltd(002677) )
Event: on April 7, 2022, Zhejiang Meida Industrial Co.Ltd(002677) issued the 2021 annual report. In 2021, the company achieved a total operating revenue of 2.164 billion yuan, a year-on-year increase of + 22.19%; The net profit attributable to the parent company was 665 million yuan, a year-on-year increase of + 22.28%. Q4 company achieved an operating revenue of 630 million yuan, a year-on-year increase of + 6.00%; The net profit attributable to the parent company was 214 million yuan, a year-on-year increase of + 2.63%. The proposed dividend rate is 64.4% per share, with a cash dividend rate of 10.6%.
The leading position of the industry is stable, and the dual brand operation system is accelerated. In terms of products, the company’s revenue of integrated stove products in 21 years was 1.968 billion yuan, a year-on-year increase of + 24.89%, accounting for about 90% of the total revenue; The revenue of cabinet products was 59.23 million yuan, a year-on-year increase of + 35.67%, and the growth rate returned to the 19-year level. In the past 21 years, the integrated stove industry continued to maintain a high growth rate. Under the background of the poor real estate situation and the development bottleneck of traditional smoke stove consumer products, the retail volume and volume still achieved a high growth of 28% and 41% year-on-year, and the penetration rate in the smoke stove category increased to 12.4%, showing the full vitality and toughness of the industry. From January to February 2022, the sales growth rate of the integrated stove industry was 12.5%, which fell year-on-year due to the repeated impact of the epidemic throughout the country. The company’s position in the industry is stable. On the premise of intensified industry competition, it still maintains a market share of more than 20% and maintains a significant leading edge. In addition, in the past 21 years, the company has continuously promoted the publicity of the second brand “tianniu”, and invested a lot of publicity in new Internet media and offline transportation hubs, which has significantly improved its popularity. In 2021, tianniu brand added 68 first-class dealers, opened 55 new terminal stores, signed 300 dealers and opened 150 stores, providing new performance growth points for the company.
Profitability remains at a high level. The annual gross profit margin was 51.69%, with a year-on-year increase of -1.07pct; The net interest rate was 30.72%, with a year-on-year increase of + 0.02pct. Q4 gross profit margin was 50.79%, year-on-year -4.61pct; The net interest rate was 33.94%, with a year-on-year increase of -1.12pct. The annual gross profit margin remained at a high level despite the sharp rise in raw material prices, mainly due to the high-end and innovative upgrading of product structure. From the perspective of expense rate, all expense rates are basically the same as last year, and the R & D expense rate has increased slightly. The annual rates of sales, management and R & D expenses were 11.22%, 3.29 and 3.16%, respectively + 0.00, – 0.20 and + 0.10pct year-on-year; Q4 sales, management and R & D expense rates were 8.35%, 2.93 and 3.36%, respectively -1.07, – 0.03 and + 0.09pct year-on-year.
Improve the liquidity of assets and actively prepare goods to deal with the pressure of raw materials. 1) In the 21st year, the company’s cash + other current assets totaled 647 million yuan, a year-on-year increase of + 26.78%, and its asset liquidity improved; Contract liabilities + other current liabilities totaled 142 million yuan, a year-on-year increase of – 9.41%; Notes receivable and accounts receivable totaled 15 million yuan, with a year-on-year increase of – 49.31%, and the collection ability was significantly improved; In response to the rise of raw materials, the company actively prepared goods. At the end of the year, the inventory was 121 million yuan, a year-on-year increase of + 54.73%. 2) From the perspective of turnover, the company’s inventory turnover days were + 0.29 days year-on-year, basically the same; The turnover days of accounts receivable were 3.27 days, with a year-on-year increase of -1.03 days, which was significantly improved. 3) The net operating cash flow of the company in the past 20 years was 619 million yuan, a year-on-year increase of – 2.41%; Q4’s net operating cash flow was 174 million, a year-on-year increase of – 25.60%, which may be mainly due to the significant increase in Q4’s expenses for advertising this year.
Continue to promote the transformation of diversified channels and accelerate the expansion of new products. 1) Channel side: dealer channel. The company has added more than 300 first-class dealers and 380 terminal stores in 21 years; For e-commerce channels, the company further increased marketing investment and invited top stream stars to bring goods live; Ka channel: in 21 years, the company added more than 330 chain home appliance stores, 195 chain building materials stores and 320 e-commerce sinking channel outlets to further consolidate the brand influence; In the past 21 years, the company has implemented and installed more than 10 hardbound engineering projects, and the engineering channels have taken off rapidly. 2) Product side: on March 23, Meida heavy launched the Integrated Dishwasher developed in cooperation with Panasonic, which can realize the functions of washing, cutting, draining, dishwashing and storage within one square meter. In the future, the company will continue to accelerate the R & D and upgrading of new products such as integrated stove, sink and dishwasher, and further improve the appearance, performance and function of products while continuously enriching the product line in the kitchen field, so as to better meet the needs of consumers for smart and healthy life.
Profit forecast and investment rating: the integrated stove industry is in a period of rapid expansion, the penetration rate is expected to continue to improve, and the long-term market space is broad Zhejiang Meida Industrial Co.Ltd(002677) as a leader in the industry, on the one hand, it will increase investment in channel and brand construction, develop its strengths and make up for its weaknesses. On the other hand, it will firmly grasp the advantages of R & D and pay attention to the innovation and iterative upgrading of product lines. Its long-term competitiveness is expected to be further consolidated. We estimate that the company’s operating revenue in 22-24 years will be RMB 2.549/29.84/3.447 billion respectively, with a year-on-year increase of + 17.8% / + 17.0% / + 15.5% respectively; The net profit attributable to the parent company was RMB 788 / 927 / 1074 million, with a year-on-year increase of + 18.5% / + 17.7% / + 15.8% respectively, and the corresponding PE was 11.72/9.96/8.60 times. Maintain the “buy” rating.
Risk factors: the price of raw materials continues to rise, the competition in the integrated stove industry intensifies, the policy changes in the downstream real estate industry, the company’s new product launch is less than expected, the company’s channel development is less than expected, and the epidemic situation in China is repeated.
