\u3000\u3 China Vanke Co.Ltd(000002) 959 Bear Electric Appliance Co.Ltd(002959) )
Event:
The company released its 2021 annual report: in 2021, it achieved a revenue of 3.61 billion yuan (yoy-1.5%), and a net profit attributable to the parent company of 280 million yuan, a year-on-year decrease of 33.8%. Among them, the company’s Q4 revenue is 1.24 billion yuan (YoY + 6.8%), and the net profit attributable to the parent company is 90 million yuan (yoy-11%). The return of Q4 revenue is related to the increase in sales of multi-functional electric hotpot, health pot, humidifier, dryer, heater and other products in winter. In 2021, facing the pressure of the “housing economy” caused by the epidemic, the rise of raw material prices and the shortage of chips, the company’s annual revenue growth fell, but its overall operation was stable.
Comments:
The revenue growth of 21q4 returned to positive growth, and the required categories were stronger than the optional categories throughout the year. Quarterly, Q1 / Q2 / Q3 / Q4 company’s revenue is 9.1 / 7.3 / 7.3 / 1.24 billion yuan (YoY + 23% / – 26% / – 6% / + 7%). The decline in q2-q3 revenue growth was mainly due to the high base of the previous year + slow recovery of consumption + price increase restraining some demand, and the recovery of Q4 revenue growth to positive single digits was mainly due to the decline of high base and the appropriate recovery of optional consumption. By category, in 2021, the income of Western-style electrical appliances, electric appliances, electric appliances, pot appliances, pot appliances, household appliances and other small appliances (personal care + mother and baby) increased by + 2%, – 31%, – 19%, + 13%, + 12%, + 1% and + 96% respectively year-on-year. In 2021, the company focused on single products, streamlined SKUs and paid more attention to essential categories, among which electric kettle / rice cooker achieved good growth; On the basis of consolidating the advantages of small electricity in the kitchen, the company vigorously cultivates personal care, life, mother and baby and other categories. Tiktok: 1) online: in the traditional business, the proportion of self promotion is increased, and the new channels such as Kwai Yin, fast hand and Xiao Hong book are gradually established through self broadcasting, high-quality short video and IP marketing. 2) Offline: the proportion of sales is increasing, and maintain friendly business relations with key customers through gift points channels; 3) Overseas: mainly OEM, but the proportion of private brands is increasing. The company’s private brands are mainly promoted in Southeast Asia, South Korea and Russia through local agents and e-commerce channels.
The product structure was improved, and the gross profit margin rose against the trend. In 2021, the company’s gross profit margin was 32.8% (YoY + 0.4pcts), of which 21q4 gross profit margin was 29.9% (YoY + 5.2pcts). The gross profit margin increased significantly in the fourth quarter, mainly due to the low base and the upgrading of product structure offsetting the rise in raw material prices. In 2021, the company’s sales expense ratio was 15.3%, with a year-on-year increase of 3.3 percentage points, mainly due to the increase in the proportion of online self operation and the decrease in the proportion of distribution; The R & D expense rate was 3.6%, with a year-on-year increase of 0.7 percentage points. The company established the current, medium and long-term hierarchical R & D system and optimized the product development process. In terms of balance sheet, at the end of 2021, the company’s own cash was 1.82 billion yuan, accounting for 50.2% of the total assets, and the surplus food was sufficient to withstand the cold winter; Accounts receivable decreased by – 12% year-on-year, of which the settlement of notes receivable decreased significantly; Inventories rose 16% year-on-year. Accounts payable at the end of 2021 decreased by 7% year-on-year; Contract liabilities were – 34% year-on-year. In terms of income quality, the company’s net operating cash in 2021 was 170 million yuan, a year-on-year decrease of 86%, mainly due to the year-on-year decrease of 4% in cash received from selling goods and providing labor services, while the cash paid by the company for purchasing goods and receiving labor services was + 30% year-on-year, and the cash paid to and for employees was + 27% year-on-year.
Profit forecast, valuation and rating: optimistic about the long-term development of creative small household appliances and maintain the company’s “overweight” rating Bear Electric Appliance Co.Ltd(002959) is a leading enterprise in the creative small household appliances industry, which will benefit from the consumption upgrading trend. Small household appliances are in a period of rapid development. With the investment of new media channel resources, the development of new categories and the expansion of overseas markets, the company is optimistic about the long-term development of the company. In view of the repeated epidemic and the high price of raw materials, the net profit attributable to the parent company in 202223 was reduced to RMB 330 / 400 million (17% / 11% lower than the previous forecast), and the profit forecast for 2024 was increased to RMB 460 million, maintaining the “overweight” rating of the company.
Risk tip: competition in the small household appliance industry intensifies, and the price of raw materials rises sharply.
