\u3000\u3 China Vanke Co.Ltd(000002) 959 Bear Electric Appliance Co.Ltd(002959) )
Event: Bear Electric Appliance Co.Ltd(002959) released the annual report of 2021. The company achieved revenue of 3.61 billion yuan in 2021, yoy-1.5%; Achieved performance of 280 million yuan, yoy-33.8%. After conversion, the revenue of 2021q4 in a single quarter was 1.24 billion yuan, yoy + 6.8%; Achieved performance of 90 million yuan, yoy-11.1%. Looking forward to the follow-up, we believe that as the company continues to expand new categories, actively embrace emerging channels and continue to explore overseas markets, the revenue is expected to grow steadily.
Q4 company achieved steady growth in revenue: in 2021q4, the revenue of little bear was yoy + 6.8%, and the growth rate increased by 13.1pct month on month. Compared with 2019q4, revenue in 2021q4 increased by 28.4%. Q4 the online market boom of small kitchen appliances in China has improved. According to the business consultant data, the sales volume of kitchen small appliances on Q4 Taoxi platform was yoy-1.7%, up 3.1pct month on month. According to our estimates, Q4 bear kitchen appliances revenue growth rate of more than 5%. Among them, small kitchen appliances such as pot, western style and pot grew rapidly. Q4 company’s income of personal care small household appliances increased rapidly. According to the business consultant data, Q4 company’s sales of personal care small household appliances on Amoy platform were yoy + 140.9%. Tiktok is now actively expanding new channels such as jitter and Kwai, and launching brand marketing and product promotion through self service shops. Q4 company’s tiktok channel revenue has increased rapidly.
The gross profit margin of Q4 in a single quarter increased significantly year-on-year: the gross profit margin of Q4 company was 29.9%, year-on-year + 5.2 PCT and month on month + 6.3 PCT. Wind data shows that during 2021q4, Shanghai copper index, Shanghai aluminum index and plastic index yoy + 29.0% / + 31.7% / + 7.3%. Under the pressure of Q4 raw material cost, the profitability of the company has improved significantly year-on-year. We believe that the main reasons are as follows: 1) the proportion of self operated sales with high gross profit margin of the company has been increasing, driving the overall gross profit margin of the company. At present, the company’s self operated proportion on tmall exceeds 50%; 2) The company adheres to the high-end product strategy and promotes the high-end product structure. The increase of sales proportion of high-end and high unit price products drives the increase of gross profit margin.
Q4’s profitability decreased slightly in a single quarter: the net interest rate of Q4 company was 7.6%, with a year-on-year increase of – 1.5 PCT and a month on month increase of + 0.3 PCT. We believe that the slight decrease of Q4 company’s net interest rate is mainly due to: 1) with the continuous increase of the company’s self operated proportion, the market promotion fee and sales salary increase accordingly. The sales expense ratio of Q4 company was 15.0%, with a year-on-year increase of + 6.8pct; 2) Q4 company’s asset impairment loss was 16.73 million yuan, a year-on-year increase of + 14.33 million yuan, mainly for the provision for bad debts of receivables.
Net operating cash flow in Q4 decreased year-on-year: the company’s net operating cash flow in Q4 decreased by – 120 million yuan year-on-year, mainly due to 1) the significant increase in sales expenses paid after the increase of the company’s self operated proportion. Q4 company paid other cash related to operating activities + 140 million yuan year-on-year; 2) Q4 the price of raw materials is still high, and the amount of raw materials purchased by the company has increased. The cash paid by Q4 company for purchasing goods and receiving labor services was + 80 million year-on-year.
Investment suggestion: Xiaoxiong is a leading online small household appliance company, occupying the head share in many long tail markets. Affected by the high base of the epidemic and the sharp rise in the price of raw materials, the company’s performance is under pressure in the short term. In April 2022, the company’s cooperative warehouse Hunan Zhongcang supply chain caught fire, resulting in damage to the company’s inventory, and the value of damaged goods was about 55 million yuan. Zhongcang supply chain promises to be fully liable for the losses of the company. In the long run, the company’s product structure is continuously optimized and will continue to benefit from the online dividends of small household appliances. With the recovery of consumer demand in the small household appliance industry and the gradual return of raw material prices to normal levels, the company’s performance is expected to resume rapid growth. We expect the company’s EPS from 2022 to 2024 to be 2.21/2.66/3.20 yuan respectively, maintaining the Buy-A investment rating.
Risk tip: the price of raw materials has risen sharply and the industry competition has intensified
