\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Core view
Huali Industrial Group Company Limited(300979) released the annual report, the company achieved an operating revenue of 17.47 billion yuan, with a year-on-year increase of 25.4%, and a net profit attributable to the parent company of 2.77 billion yuan, with a year-on-year increase of 47.3%, of which Q4 achieved revenue and net profit attributable to the parent company of 4.84 billion and 770 million yuan, with a year-on-year increase of 33.5% and 37.4%, and the growth of Q4 revenue increased month on month. The annual report plans to send 11 yuan out of 10.
In terms of sections, the revenue of sports casual shoes / outdoor boots / sports sandals + slippers and others was 14.21 billion / 1.58 billion / 1.64 billion respectively, with a year-on-year increase of 26% / 6% / 47%. The rapid growth of sports sandals + slippers was mainly driven by the orders of ugg home wool slippers. From the perspective of component price: in 2021, the sales volume reached 210 million pairs, with a year-on-year increase of 29.5%. ASP was 82.7 yuan, with a year-on-year decrease of 3.1%. The decline of ASP was mainly affected by the appreciation of RMB. If the influence of exchange rate was excluded, ASP increased by about 4.5%. By Region: the United States / Europe / other countries achieved revenue of 15.2 billion / 2.05 billion / 190 million respectively, with a year-on-year increase of 24% / 27% / 160%. In terms of sub brands: priced in US dollars, the sales of the top five customers Nike / Deckers / VF / puma / UA increased by 44% / 58% / 13% / 26% / 45% respectively year-on-year.
Multiple factors have driven profitability to a new high. In 2021, the gross profit margin and net profit margin of the company were 27.2% and 15.8% respectively, with a year-on-year increase of 2.4 PCTs, a record high. We believe that the main reasons include: 1) optimization of customer structure; 2) The company takes the initiative to undertake orders with high profit margin; 3) The capacity utilization rate remained high. In 2021, the capacity utilization rate was 95.9%, with a year-on-year increase of 5 PCTs. 4) Smooth cost transmission mechanism; 5) The scale effect brought by the rapid growth of the company's income.
Looking forward to the next 3-5 years: 1) revenue side: it can still maintain rapid growth. We believe that the demand for overseas leading brands is still strong, and the orders of new customers of onrunning, ASICs and other brands are expected to rise rapidly. In the follow-up, it is not ruled out that well-known brands will continue to be included in the list of new customers. In terms of capacity expansion, the company will expand its capacity by means of capacity climbing (completed in 21h1) of three factories in Weilin, Yongshan and Hongxin, Vietnam, as well as reconstruction and expansion of old factories and improvement of internal efficiency. In addition, new factories in Indonesia and Myanmar are also expected to contribute to the increment. 2) Profit side: the gross profit margin and net profit margin are expected to remain high. We believe that the driving factors for profit in 2021 are still applicable in 2022. On the other hand, the dividend rhythm in 2022 is expected to return to normal (an additional medium-term dividend is added in 2021), and the effective tax rate will decline, which has a positive impact on the net profit margin. In addition, the company released the annual responsibility report for the first time, which reflects more transparent corporate governance and is expected to be more favored by the brand.
Profit forecast and investment suggestions
According to the annual report, we fine tune the profit forecast from 2022 to 2023, and predict that the earnings per share from 2022 to 2024 will be 2.92 yuan, 3.58 yuan and 4.35 yuan respectively (compared with 2.99 yuan and 3.57 yuan in 20222023). With reference to comparable companies, we give the company 30 times PE valuation in 2022, corresponding to the target price of 87.6 yuan, and maintain the "buy" rating of the company.
Risk tips: exchange rate fluctuations, repeated epidemics, trade risks, rising labor costs and rising prices of raw materials
