\u3000\u3 China Vanke Co.Ltd(000002) 677 Zhejiang Meida Industrial Co.Ltd(002677) )
Event: Zhejiang Meida Industrial Co.Ltd(002677) released the annual report of 2021. In 2021, the company achieved an operating revenue of 2.164 billion yuan, an increase of 22.19% year-on-year; The net profit attributable to the parent company was 665 million yuan, a year-on-year increase of 22.28%. Q4 achieved an operating revenue of 630 million yuan in a single quarter, a year-on-year increase of 6%, and the net profit attributable to the parent company was 214 million yuan, a year-on-year increase of 2.63%. In 2021, the company plans to distribute cash dividends of RMB 6.60 (including tax) for every 10 shares to all shareholders, totaling RMB 426 million.
The company’s revenue grew steadily. In 2021, the company’s revenue increased by 22.19% year-on-year. In terms of products, integrated stove products were the main source of revenue. During the reporting period, the revenue was 1.968 billion yuan, an increase of 24.89% year-on-year, accounting for 90.97% of the revenue, an increase of 1.97 PCT year-on-year. The company’s high revenue of integrated stove products is mainly due to the rapid development of integrated stove industry. According to the data of ovicloud, the market scale of integrated stoves in 2021 was 3.04 million units, with a year-on-year increase of 28% and 41% respectively. The revenue of cabinets and other products of the company was 59 million yuan and 136 million yuan respectively, with a year-on-year change of 35.67% and – 9.94%.
The gross profit margin decreased and the net profit margin remained stable. In 2020, the gross profit margin of the company’s sales was 51.69%, a decrease of 1.07pct compared with the same period last year, of which the gross profit margin of integrated stove products was 54.13%, a decrease of 2.39pct compared with the same period last year. We believe that the main reason is the sharp rise in the price of raw materials and the increased cost pressure. In 2021, the company’s sales, management, R & D and financial expenses changed by 22.15% / 15.27% / 26.0% / – 31.69% year-on-year, and the expense rates were 11.22% / 3.29% / 3.16% / – 0.69% respectively, with a year-on-year change of 0 / – 0.2/0.09/0.55pct. The company’s financial expense rate changes a lot, mainly due to the decrease of interest income from bank demand agreement deposits. During the reporting period, the company obtained investment income of 32.31 million yuan, mainly from the purchase of financial products. The net operating cash flow of the company was 618 million yuan, a year-on-year decrease of 2.41%, mainly due to the increase in advertising and promotion fees. In 2021, the advertising and business publicity expenses were 238 million yuan, an increase of 76.37% year-on-year. Overall, the company’s net interest rate in 2021 was 30.72%, with a year-on-year increase of 0.02pct.
Accelerate the transformation of channels and the construction of diversified marketing channels. During the reporting period, the company accelerated channel reform and diversified marketing channel construction, and continued to promote the development of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) deep integration. In the e-commerce channel, the company invited top traffic stars to carry goods live, promote channel sinking, strengthen mutual drainage on and off the line, and improve competitiveness. Offline channels, the company has improved the overall quality of the distribution network. In 2021, it added more than 300 first-class dealers and 380 terminal stores. The company also continues to expand Ka channels, engineering channels, home decoration channels, community channels and other sales channels. By the end of 2021, the company’s Ka home appliances and building materials stores had reached a total of more than 2500 stores.
Investment suggestion: the integrated stove industry is in a period of rapid growth, and the penetration rate will continue to increase. As a leader in the integrated stove industry, with the promotion of channel reform, the company’s performance is expected to maintain rapid growth. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 785 million, RMB 927 million and RMB 1056 million, and the corresponding EPS will be RMB 1.21, RMB 1.43 and RMB 1.63, maintaining the “recommended” rating.
Risk tip: the risk of intensified industry competition, the risk of raw material price changes, and the risk that the penetration rate is lower than expected.
