\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Key investment points:
Event: the company released its annual report for 2021, and achieved an operating revenue of 17.47 billion yuan in 2021, with a year-on-year increase of 25.40% (excluding the impact of exchange rate changes, a year-on-year increase of 34.09%); The net profit attributable to the parent company was 2.768 billion yuan, a year-on-year increase of 47.34% (excluding the impact of exchange rate changes, a year-on-year increase of 57.55%).
Revenue growth was steady. Quarterly, Q1, Q2, Q3 and Q4 achieved operating revenue of RMB 3.702 billion, 4.492 billion, 4.440 billion and 4.835 billion respectively, with a year-on-year increase of 7.77%, 28.52%, 31.46% and 33.46% respectively. The company actively promoted cooperation with new brands. ASICs, on and NewBalance all achieved mass production and shipment in the reporting period. At the same time, the company actively expands production capacity, implements lean production, improves the operation efficiency of various factories, and attracts various sports brands to increase orders to the company. In 2021, the company sold 210 million pairs of sports shoes, with a year-on-year increase of 29.46%.
The product structure is relatively stable. In terms of products, in 2021, the operating revenue of sports and leisure shoes, outdoor boots and shoes, sports sandals / slippers and other products increased by 25.94%, 6.16% and 46.60% respectively year-on-year, and the proportion of operating revenue was 81.35%, 9.06% and 9.37% respectively, with a year-on-year increase of + 0.35, - 1.65 and + 1.36pct respectively.
The top five customers accounted for 91.65%. In 2021, the company's top five customers were Nike, Deckers, VF, Puma and underarmour, with operating revenue of RMB 6181 million, 37.63 million, 3.208 million, 1.893 billion and 965 million respectively. Excluding the impact of exchange rate, the company's revenue increased by 43.7%, 57.8%, 13.4%, 26.1% and 44.9% year-on-year respectively, accounting for 35.38%, 21.54%, 18.37%, 10.84% and 5.52% respectively. Among them, Nike is still the company's largest customer, and the revenue of Nike, Deckers and underarmour is growing rapidly.
Profitability continued to increase. In 2021, the company's gross profit margin and net profit margin were 27.23% and 15.84% respectively, with a year-on-year increase of +2.41 and +2.36pct respectively. Under the influence of the epidemic, the profit margin was still greatly improved, mainly because the company had significant strategic advantages in high-quality key customers. At the same time, the company continued to optimize customers and product structure, actively promoted automation and lean production, effectively enhanced scale effect and improved production efficiency.
Investment suggestion: in 2021, the company has three new plants put into operation and achieved rapid capacity climbing. At the same time, the company will continue to assist the capacity improvement of the original plants by building new plants and purchasing plants. It is estimated that the operating revenue of the company from 2022 to 2024 will be RMB 21.13/252.83/30.49 billion respectively, the net profit attributable to the parent company will be RMB 3.494/43.34/5.191 billion respectively, and the EPS will be RMB 2.99/3.71/4.45/share respectively. Based on the high-quality key customer strategy implemented by the company, the company's orders have increased steadily, the demand is full, the company's growth is steady and the profitability continues to improve. Give the company 35-38 times PE valuation in 2022, with a reasonable price range of 104.65-113.62 yuan, and maintain the "recommended" rating.
Risk tip: the capacity expansion is less than expected, and the epidemic repeatedly affects the operating rate.
