\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 a revenue of 3.606 billion yuan in 2021, a year-on-year decrease of 1.46%; The net profit attributable to the parent company was 283 million yuan, a year-on-year decrease of 33.81%. Among them, the revenue in 2021q4 was 1.242 billion yuan, a year-on-year increase of 6.83%; The net profit attributable to the parent company was 94 million yuan, a year-on-year decrease of 11.13%.
In the same period, the growth rate of small electricity in the kitchen fell slightly due to the high base effect, and online is still the main sales channel. In the 21st year, the revenue of kitchen small electricity was 2.93 billion yuan (- 5.9%), which still contributed to the main revenue, accounting for about 81% of the total revenue (- 4pct); The growth rate of other small household appliances was higher, with a year-on-year increase of + 96.1% to 230 million yuan. From the perspective of kitchen small electricity, 1) sub products: the growth rate of emerging categories with good performance under the catalysis of the epidemic in 20 years has dropped, and pot and pot products are stable. In 21 years, the demand for electric / electric / Western kitchen small electricity was – 31.03% / – 18.84% / + 1.81% year-on-year. The demand for pots and pans was relatively stable, with a year-on-year increase of 12.56% / 11.50%. 2) Sub channel: online is still the main sales channel, accounting for 96% of China’s revenue +. The company’s online revenue fell by 2.4% to 3.25 billion yuan in 21 years, mainly due to the high base effect in the same period last year and the weak consumer demand in 21 years. According to ovicloud, the sales volume of emerging small household appliances such as cooking machine / health pot / frying and baking machine in 21 years was – 20.7% / + 2.3% / – 9.7% year-on-year, and the industry as a whole was under pressure.
The overall profitability is stable, the competition intensifies and the promotion of new channels pushes up the sales expenses. Gross profit margin: under the pressure of rising raw material prices, the comprehensive gross profit margin in 21 years increased by + 0.4pct to 32.78% year-on-year, of which the online gross profit increased by 1.8pct to 34.3% year-on-year, mainly due to the company’s better digestion of the cost pressure by adjusting the product structure to improve the average price of products. Rate side: the company’s sales / management / R & D rate in 21 years increased from + 3.3 / + 0.3 / + 0.7 / – 0.04pct to 15.3% / 3.6% / 3.6% year-on-year. The sales rate has increased significantly, mainly due to 1) the reduction of brand publicity under the epidemic situation in 20 years, resulting in a low base in the same period; 2) at this stage, the competition of online competition intensifies, tiktok and other new platforms, and the cost of publicity is higher, pushing up the promotion cost. Net profit side: To sum up, the net interest rate in 21 years decreased by 3.8pct to 7.9% at the same time. Cash flow: the net operating cash flow of the whole year decreased by 85.8% to 170 million, mainly due to the increase in cash paid for purchasing goods and receiving labor services.
Creative small household appliance leaders, category development and build a growth curve. The online of small household appliances has reduced the supply threshold of the industry, increased the number of new players and raised the cost of online drainage. However, we believe that Bear Electric Appliance Co.Ltd(002959) as a platform company for creative small household appliances, it is less subject to the pressure of single product competition; Long tail products that continuously tap the needs of consumer segments can form a certain brand mind; The company has many years of experience in e-commerce operation and is highly sensitive to channel changes. In the future, the company is expected to further develop categories such as mother and child care and personal care, and build a growth curve.
Profit forecast and investment suggestions. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 339 / 418 / 508 million respectively, with a year-on-year increase of 19.7% / 23.2% / 21.6%. The company has large long-term growth space and maintains its previous “buy” rating.
Risk tip: the expansion of new products is less than expected, and the profit is damaged due to the price war
