\u3000\u3 China Vanke Co.Ltd(000002) 677 Zhejiang Meida Industrial Co.Ltd(002677) )
Event:
On April 7, 2022, Zhejiang Meida Industrial Co.Ltd(002677) released the annual report of 2021. The company achieved operating income of RMB 1.922 billion in 2021; The net profit attributable to the parent company was 665 million yuan (+ 22.28%). In 2021q4, the company realized an operating revenue of 630 million yuan (+ 6.00%), and a net profit attributable to the parent company of 214 million yuan (+ 2.63%). Based on the total share capital of 646 million shares at the end of 2021, the company plans to distribute cash dividends of RMB 6.6 (including tax) for every 10 shares to all shareholders, with a total of RMB 426 million.
Key investment points:
In 2021, the annual revenue grew steadily, and the growth rate of Q4 slowed down. 1) Quarter by quarter: the company achieved a revenue of 630 million yuan (+ 6.00%) in the single quarter of 2021q4, mainly due to the downturn of the real estate market, and the positive signal of the loosening of the margin of the real estate policy from September 2021 is expected to boost the company’s future revenue; 2) By business: in 2021, the company’s integrated stove product revenue was 1.968 billion yuan (+ 24.89%), accounting for 90.97% of the total revenue. The revenue growth was mainly due to the dividends brought by the development of the industry. According to the data of ovicloud, the retail volume / volume of integrated stove in 2021 was + 28% / + 41% year-on-year respectively. The revenue of cabinet products was 59 million yuan (+ 35.67%), accounting for 2.74% of the total revenue, achieving a high growth rate.
Profitability is under pressure in the short term, and the cost side is reasonably controlled. 1) Gross profit margin: the gross profit margin of 2021q4 company is 50.79% (-4.61pct). The year-on-year decline of gross profit margin is mainly due to the rise of raw material prices; 2) Net profit margin: the net profit margin of 2021q4 company is 33.94% (- 1.12pct), and the decrease of net profit margin is less than the gross profit margin. The main reason is that the cost side is well controlled. The sales / management / R & D expense rates of 2021q4 are 8.35% / 2.93% / 3.36% respectively, with a year-on-year increase of -1.07 / – 0.03 / + 0.09pct.
Layout online e-commerce and broaden offline channels. 1) E-commerce channels: improve competitiveness through live delivery, in-depth operation, increase of online special fund products and other measures; 2) Dealer channels: in 2021, 300 + first-class dealers and 380 terminal stores will be added; 3) Ka channel: in 2021, 330 + stores of Gome and Suning chain home appliance stores will be added, 195 stores of Hongxing Red Star Macalline Group Corporation Ltd(601828) , Easyhome New Retail Group Corporation Limited(000785) and other chain building materials stores will be added, and 320 outlets of Suning, Jingdong and tmall sinking channels will be added; 4) Project Channel: sign and implement the installation 10 + hardcover project with Guorui real estate and other real estate companies in 2021; 5) Home decoration channel: cooperate with Yezhifeng, Xingyi and other home decoration companies to complement resources and expand the market share of Meida products; 6) Community channels: the first and second tier cities are actively arranged, and the number of community stores is 80 +.
Create a dual brand operation system and innovate brand marketing. 1) Midea: explore new marketing forms, cooperate with big IP Tang Palace Banquet to create the concept of Chinese Midea kitchen, establish a high-end image and enhance brand awareness; 2) Tianniu: pay attention to brand investment promotion and publicity. Throughout the year, tianniu brand added 68 first-class dealers, opened 55 terminal stores, 5 offline named high-speed trains, put TV advertisements in 2000 + high-speed train carriages, and put a lot of advertisements online on Baidu and other Internet new media platforms.
Actively expand the channel layout, promote the dual brand strategy, integrate the stove leader in the future, cover it for the first time, and give a “buy” rating. Taking advantage of the rise of the integrated stove industry, the deepening of category education and the improvement of the long-term mechanism of superimposed real estate, the company, as the leader of the industry, may continue to benefit. The company’s channel and brand are optimized in multiple dimensions, and its competitiveness is expected to be further strengthened. For the first time, the company is given a “buy” rating. We expect that the net profit attributable to the parent company from 2022 to 2024 will be 796 / 935 / 1102 million yuan, corresponding to EPS of 1.23/1.45/1.71 yuan, and the current share price corresponding to PE of 11.59/9.86/8.38 times.
Risk tips: repeated covid-19 epidemic, fluctuations in the real estate market, fluctuations in the price of main raw materials, intensified competition in the integrated stove market, and less than expected new product research and development.
