\u3000\u3 China Vanke Co.Ltd(000002) 572 Suofeiya Home Collection Co.Ltd(002572) )
Key investment points
Event: the company issued the 2021 annual report. In 2021, the company achieved a revenue of 10.407 billion yuan, an increase of 24.59% at the same time; The net profit attributable to the parent company was 123 million yuan, with a decrease of 89.72%; The non net profit deducted was 32 million yuan, a decrease of 96.98%. In a single quarter, Q1-Q4 company achieved revenue of RMB 1.76 billion, 25.4 billion, 29.44 billion and 3.163 billion respectively, with a year-on-year increase of + 130.59% / + 41.76% / + 15.93% / – 2.92% respectively; Q1-Q4 realized a net profit attributable to the parent company of RMB 118 / 3.28 / 4.03 / – 726 million respectively, with a year-on-year increase of + 812.35% / – 8.68% / + 13.71% / – 246.66% respectively.
A high proportion of bill impairment is accrued, which can be adjusted and loaded lightly. The profit fluctuation in 2021 is mainly due to the company’s provision for impairment of individual assets totaling 909 million yuan for the amount receivable from Evergrande group. If the impact of asset impairment loss is excluded, the company’s annual net profit attributable to the parent company in 2021 was 1.032 billion yuan, a year-on-year increase of – 13.4%, corresponding to the net profit attributable to the parent company in Q4, 183 million yuan, a year-on-year increase of – 63%. According to the announcement of the company, the year-end balance of accounts receivable and goods issued by the company to Evergrande in 2021 totaled 1.185 billion yuan, including 341 million yuan of accounts receivable, 462 million yuan of notes receivable and less than 300 million yuan of residual risk exposure. We believe that the company has shown its determination to withdraw a large proportion of bill impairment losses, and the credit risk has been fully released. It is expected to be light in 2022.
The short-term decline in profits caused by multiple factors is expected to be repaired in 2022. 1) In terms of profitability, the company achieved a gross profit margin of 33.21% (- 3.35pct.) in 2021, The net interest rate attributable to the parent company is 1.18% (-13.09pct.), The gross profit margin of 21q4 in a single quarter was 28.75% (- 5.46pct.), The net interest rate attributable to the parent company is -22.95% (-38.14pct.). The gross profit rate declined slightly, mainly due to the rise in the price of raw materials in the second half of the year, the increase in sample loading subsidies of dealers, the rapid rise of product SKUs in the short term and the adjustment of transportation expenses from expenses to costs (the total transportation expenses in 2020 are about 56.73 million yuan). 2) In terms of period expenses, the sales expense rate in 2021 is 9.70% (+ 0.53pct.); The management fee rate is 7.01% (-0.31pct.), The R & D expense rate is 2.79% (+ 0.31 PCT.); The financial expense rate is 0.65% (+ 0.23pct.). 3) In terms of cash flow, the net cash flow from operating activities of the company in 2021 was 1.419 billion yuan (+ 23.93%); Notes and accounts receivable amounted to RMB 1.180 billion, including notes receivable of RMB 152 million, a decrease of 83.92% over the beginning of the year, mainly due to the overdue transfer of Evergrande notes into accounts receivable and the purchase of Evergrande’s assets with Evergrande commercial bills. Looking forward to 2022, with the price adjustment in place, the promotion of product standardization and the continuous optimization of business structure, the profitability is expected to return to normal.
Retail sales are stable, the volume of packaged goods is large, and the bulk business is adjusted. 1) Retail channel: in 2021, the revenue of retail channel was 8.703 billion yuan (+ 28.36%), of which the revenue of 21q4 retail channel was about 2.67 billion yuan, an increase of about 9%. In 2021, the distribution channel revenue was 8.360 billion yuan (+ 27.99%), accounting for 80.33% (+ 2.13pct.), Among them, the revenue of 21q4 distribution channel was about 2.57 billion yuan, an increase of about 8%. 2) Packaged channel: the revenue of 2021 company’s packaged channel is 529 million yuan, an increase of about 3 times, of which 21q4 revenue is 216 million yuan. The company has signed in-depth cooperation agreements with head decoration enterprises such as Xingyi decoration and Shengdu home decoration, and promoted the cooperation between dealers and local small decoration enterprises to ensure the rapid and large-scale volume of the whole decoration business. 3) Bulk channels: in 2021, the revenue of bulk channels was 1.604 billion yuan (+ 6.64%), accounting for 15.41% (- 2.59 PCT.) of the main revenue. Among them, the revenue of 21q4 bulk channel is about 450million yuan, a decrease of 42%. With the company’s bulk business focusing on developing high-quality core real estate developers with strong payment ability, increasing the proportion of dealers, and paying attention to the recovery of accounts receivable and risk control, we expect that the company’s customer structure will continue to be optimized.
Multi category and multi brand efforts to stabilize and sink the market layout. 1) Wardrobe and its supporting products: in 2021, the revenue was 8.269 billion yuan (+ 23.38%), accounting for 79.46% (- 0.77pct.), The gross profit margin is 35.71% (-4.73pct.). By the end of 2021, Suofeiya Home Collection Co.Ltd(002572) cabinet product stores had 2730 (+ 11), accounting for 66% of stores in the fourth and fifth tier cities, and the sinking market layout was further developed. The unit price per customer of Suofeiya Home Collection Co.Ltd(002572) factory was 14491 yuan, an increase of 9.63% at the same time. 2) Cabinet: in 2021, the revenue was 1.419 billion yuan (+ 17.25%), accounting for 13.64% (- 0.86pct.), The gross profit margin is 26.26% (+ 3.59pct.). By the end of 2021, there were 1122 stores (+ 14) and 929 dealers (- 29), strengthening the management of dealers. 3) Wooden door: in 2021, the revenue was 458 million yuan (+ 56.86%), accounting for 4.40% (+ 0.91pct.), The gross profit margin is 17.14% (+ 2.56pct.). By the end of 2021, there were 1603 wooden door stores (+ 390). 4) Milanna: since independent investment promotion in 2021, milanna has made efforts through all channels. By the end of the year, milanna had 360 dealers and 212 specialty stores.
The whole customization promotes category extension, and the effect of in-depth reform may appear. In December 2021, the company proposed the “whole family customization” strategy, upgraded the brand positioning from “cabinet customization expert” to “wardrobe | whole family customization”, and officially launched 7 categories and 8 + 1 space overall solutions to provide consumers with more comprehensive category ecology and higher product standards. In the future, the company will continue to take the wardrobe as the entrance, extend the category to a far end and reconstruct the competitiveness of retail terminals. At the same time, the company continues to improve the category matrix and promote the promotion of Suofeiya Home Collection Co.Ltd(002572) , Simi, Milana and Huahe in all channels and categories; It is expected that with the gradual completion of the “whole” upgrading of terminal stores, it is expected to add steady growth momentum to the company’s retail business.
Investment suggestion: Suofeiya Home Collection Co.Ltd(002572) as the leader of customized home furnishings in China, the whole decoration channel is gradually in large quantity, and multiple brands work together. We are optimistic about the long-term and steady development of the company. We expect the company to achieve operating revenue of RMB 12.010, 13.667 and 15.335 billion in 20222024, with a year-on-year increase of 15.4%, 13.8% and 12.2%, and realize net profit attributable to the parent company of RMB 14.04, 16.69 RMB 1.879 billion (the profit forecast was fine tuned according to the annual report data, and the previous forecast value was RMB 1.453 billion and RMB 1.677 billion from 2022 to 2023), with a year-on-year increase of 1045.1%, 18.9% and 12.6%, maintaining the “buy” rating.
Risk tips: real estate policy regulation risk, market competition risk, rising labor cost risk, repeated epidemic risk, etc
