\u3000\u3 Shengda Resources Co.Ltd(000603) 195 Gongniu Group Co.Ltd(603195) )
Event:
The company released its 2021 annual report: in 2021, it achieved a revenue of 12.385 billion yuan (YoY + 23%), and a net profit attributable to the parent company of 2.78 billion yuan, a year-on-year increase of 20%. Among them, the company’s Q4 revenue in 2021 was 3.372 billion yuan (YoY + 16%), the net profit attributable to the parent was 570 million yuan (yoy-20%), and the net profit not attributable to the parent was 540 million yuan (yoy-20%). The company announced the 2022 restricted stock incentive plan, which plans to grant 1.55 million shares to 670 people (accounting for 0.26% of the total share capital). The unlocking condition is that the company’s income in 22 / 23 / 24 years is not less than 12.34/13.60/14.27 billion yuan, or the net profit attributable to the parent is not less than 2.80/30.7/3.23 billion yuan.
Comments:
We will continue to launch innovative products and comprehensively promote channel reform and expansion. By category, the revenue of electrical connection business, intelligent electrical lighting business and digital accessories business in 2021 was 6.413 billion yuan, 5.551 billion yuan and 373 million yuan respectively, with a year-on-year increase of 16%, 37% and – 11% respectively, and a two-year compound growth rate of 23%, 26% and 4% respectively. (1) Electrical connection business is the core business of the company, which has maintained a steady growth momentum relying on brand advantages and hardware channel advantages. At the same time, the company has successively launched new energy charging guns and new energy charging piles around the two major tracks of new energy and intelligent ecology, and has become the champion of online category sales; (2) The growth of intelligent electrical lighting business mainly relies on the comprehensive upgrading of decoration channels, in which the revenue of wall switch and LED lighting business increased by 30% and 39% respectively; (3) The year-on-year decline in digital accessories revenue was mainly affected by the new product launch cycle and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) traffic changes. From the perspective of different channels, 1) TOC: Centering on the one-stop purchase demand of front decoration, the decoration channel has further promoted the monopoly and integration, introduced electrical lighting products such as wall switch socket, LED lighting, circuit breaker, household appliances, intelligent door lock, and has successfully developed more than 18000 terminal network points; Hardware channels continue to strengthen the cultivation of super selling points and improve the efficiency and output of single stores. 2) Tob: the company has continuously introduced industry professionals and rapidly improved the b-end organization ability. In terms of home decoration business, the company has established solid cooperation with more than 120 national well-known decoration companies. During the reporting period, the sales revenue of b-end channel increased by 175% year-on-year. 3) E-commerce channels: in 2021, the sales revenue of e-commerce channels increased by 32% year-on-year, and tmall’s market share of converters and wall switches and sockets continued to rank first.
The price of raw materials rose + the hedging effect declined, and the gross profit margin of 21q4 declined significantly. In 2021, the company’s gross profit margin was 36.95% (yoy-3.2pcts), of which the gross profit margin of Q4 in 21 years was 32.27%, with a year-on-year change of – 9.3pcts, which was the largest decline in a single quarter of this year. The main reasons include: 1) the price of raw materials rose, the price of copper, the company’s main raw material, rose by 14% year-on-year, and the hedging effect implemented by the company weakened. 2) The company has not raised prices further since Q3, and the effect of price increase in the early stage is digested by the rising raw material prices. In 2021, the company’s sales expense rate, management expense rate and R & D expense rate were 4.5%, 3.5% and 3.8% respectively, with year-on-year changes of – 0.6pcts, – 0.8pcts and – 0.2pcts. The company’s expenses were properly controlled. With the rising price of raw materials, the company took the initiative to reduce the sales expenses. On the other hand, the company increased the investment in R & D expenses and established R & D and operation headquarters to drive business upgrading with the help of R & D.
Profit forecast, valuation and rating: optimistic about the leading position of the company’s electrician and lighting, and maintain the “overweight” rating Gongniu Group Co.Ltd(603195) as a leader in electrical engineering, we have clear long-term development planning, consolidate the leading advantages of core business converters and wall switch sockets, accelerate the layout around the two tracks of new energy and intelligent ecology, and we are optimistic about the long-term development of the company with the listing of new products and good momentum. In view of the repeated epidemic and the high price of raw materials, we lowered the net profit attributable to the parent company from Gongniu Group Co.Ltd(603195) 23 to 3.13 billion yuan and 3.59 billion yuan (down 3.4% and 5.4% respectively compared with the previous time), and increased the profit forecast for 2024 to 4.04 billion yuan, corresponding to 24, 21 and 19 times of PE respectively, maintaining the “overweight” rating of the company.
Risk tip: the price of raw materials has risen sharply; Industry competition intensifies.
