\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 828 Red Star Macalline Group Corporation Ltd(601828) )
Event overview
The company released its annual report for 2021. In 2021, the company achieved a revenue of 15.513 billion yuan, a year-on-year increase of 8.97%; The net profit attributable to the parent company was 2.047 billion yuan, a year-on-year increase of 18.31%; The net profit attributable to the parent company after deduction was RMB 1.658 billion, with a year-on-year increase of 42.62%. In a single quarter, Q1 / Q2 / Q3 / Q4 achieved revenue of RMB 3.341 billion, 4.161 billion, 3.852 billion and 4.159 billion respectively in 2021, with a year-on-year increase of 30.7%, 19.99%, 9.96% and – 11.7%; The net profit attributable to the parent company was 722 million yuan, 787 million yuan, 555 million yuan and – 18 million yuan respectively, with a year-on-year increase of 83.79%, 11.13%, – 11.69% and – 3577095%; The net profit attributable to the parent company after deducting non profits was RMB 413 million, 593 million, 462 million and 189 million respectively, with a year-on-year increase of 101.28%, 19.64%, 0.53% and 9365.2%.
Analysis and judgment:
Revenue side: the development of entrusted shopping malls was accelerated, and the rental rate of shopping malls continued to increase. During the reporting period, the company operated 95 self operated shopping malls, with an operating area of about 8.46 million square meters, and the average rental rate increased from 93.0% in the first half of the year to 94.1%. The rental and related income of self operated shopping malls was 8.095 billion yuan, a year-on-year increase of 21.1%. The company operates 278 entrusted shopping malls, with a business area of about 13.85 million square meters and an average rental rate of 91.4%. The revenue from entrusted management business was 3.256 billion yuan, a decrease of 9.1% over the same period of last year, mainly due to the decrease in the number of engineering project consulting and commercial consulting projects. The total revenue from construction and design of the company was 1.499 billion yuan, a decrease of 10.2% compared with the same period of last year, mainly due to the recognition of revenue according to the progress of engineering projects. The total recorded income of home decoration related services and commodity sales was 1.396 billion yuan, a year-on-year increase of 14%, mainly due to the improvement of the number and progress of home decoration related projects compared with the same period last year.
Profit side: net profit increased rapidly after Q4 deduction
In 2021, Q4 company realized a net profit of 189 million yuan, an increase of 9365.2% year-on-year. In terms of profitability, the company’s gross profit margin in 2021 was 61.67%, an increase of 0.16pct year-on-year. The company’s net profit margin was 14.11%, down 0.39pct year-on-year. By industry, during the reporting period, the company’s home business service industry achieved a gross profit margin of 70%, a year-on-year decrease of 0.7pct. Among them, the gross profit margin of self operated and rental income was 77.1%, an increase of 0.5pct year-on-year. In Q4, the company achieved a gross profit margin of 55.78%, a year-on-year increase of 5.08pct, and a net profit margin of about 0.93%, a year-on-year decrease of 3.65pct. The decline of Q4 net interest rate is mainly due to the company’s one-time impairment loss of intangible assets (Jisheng Weibang’s brand use right) at the end of the year and the company’s new credit impairment loss. In terms of expenses, in 2021, the company’s expense ratio increased by 1.21pct to 42.48% year-on-year, among which the sales / management / R & D / financial expense ratio increased by 1.4%, 1.11%, 0.14, -1.45pct to 13.3%, 12.92%, 0.39% and 15.86% year-on-year respectively.
Other important financial indicators
In 2021, the ending balance of investment real estate held by the company was 95.6 billion yuan, an increase of 2.6% over the end of the same period last year. Thanks to the asset light expansion mode, the company will continue to reduce capital expenditure, continue to optimize the capital structure with steady operating cash flow, and reduce the scale of interest bearing liabilities and asset liability ratio. The asset liability ratio of the company decreased from 61.2% in the same period last year to 57.4%, and the interest bearing liabilities decreased by 6.3 billion yuan to 39.1 billion yuan year-on-year.
Steady progress has been made in “light of assets, heavy operation and reducing leverage”
In 2022, the company will steadily promote its main business and expanded business around “light assets, heavy operation and reducing leverage”. The company will continue to promote the landing of theme pavilions. Adhere to the high-end of electrical appliances, improve the proportion in the field, and maintain the growth of doors and windows, soft decoration and other categories. The company will also gradually strengthen the reputation and influence of urban dealers and the general to the general manufacturer, and cooperate with manufacturers and dealers to gradually form reputation and mind on the consumer side. Meanwhile, the company will continue to deepen strategic cooperation with Alibaba to consolidate the development of Tmall city station. The company will also explore more channels to touch consumers, such as “jitter” and “WeChat”, so as to achieve global tiktok and global marketing. Finally, through the asset light expansion mode, continue to reduce capital expenditure and continue to practice the leverage reduction strategy.
Investment advice
It is expected that the company will continue to expand its business from multiple dimensions, such as “soft decoration” and “light decoration” and continue to expand its business structure from multiple channels, and reduce its retail assets. At the same time, it is expected that the company will continue to expand its soft decoration and home decoration business. Considering the great impact of the current epidemic, we lowered the forecast of the company’s revenue of 19.747/22.7 billion yuan in 22-23 years to 17.796/19.967 billion yuan, and the revenue is expected to be 22.084 billion yuan in 2024. The forecast of EPS of 1.18/1.4 yuan in 22-23 years is lowered to 0.60/0.75 yuan, and the EPS is expected to be 0.91 yuan in 2024. Corresponding to the closing price of 8.09 yuan / share on April 8, 2022, PE is 13.5 / 10.8 / 8.9 times respectively. We believe that the company’s new retail reform can be expected in the future and maintain the “buy” rating.
Risk tips
1) real estate sales were lower than expected. 2) The expansion of the new retail model is not smooth
