\u3000\u30 China Baoan Group Co.Ltd(000009) 21 Hisense Home Appliances Group Co.Ltd(000921) )
Key investment points
The loss of air conditioning business narrowed, and the company’s Q1 performance exceeded expectations
1) in 2022q1, the company achieved an operating revenue of 18.304 billion yuan, a year-on-year increase of + 31.35%; The net profit attributable to the parent company was 266 million yuan, a year-on-year increase of + 22.10%. The company’s gross profit margin in 22q1 was 18.53%, down 2.20pct year-on-year, with a relatively limited decline. The main reason is that the company reserved a large number of raw materials and finished products during 22q4 to hedge against the rise in raw material prices. 2) The company’s performance in 22q1 exceeded expectations, mainly due to the narrowing of losses in air conditioning business and the growth of investment income after consolidated three power holdings. In terms of air conditioning, the company has actively adjusted R & D, manufacturing and marketing, focused on the transformation of products and channel structure, greatly improved the coordination between central air conditioning and household air conditioning, and improved the profitability of household air conditioning. At the same time, the synergy between household air conditioning and central air conditioning is also reflected in the sales expense rate. The sales expense rate of 22q1 company was 10.47%, a year-on-year decrease of 2.61pct. 3) Due to Hisense consolidated statement of three power holdings, the investment income of Huayu three power holdings, a joint venture under three power holdings, increased. The investment income of 22q1 company was 143 million yuan, a year-on-year increase of + 321.35%.
Hisense Hitachi’s central air business is growing rapidly and continues to see the performance of many online leaders
1) according to the industry online data, the market share of Hisense Hitachi central air conditioner shipments in 2021 was 11.54%. Among them, the company is the leader in the multi online segment. In 2021, Hisense Hitachi’s multi online shipment share was 18.50%, leading Daikin and Gree by 2.57pct and 3.07pct respectively. 2) Central air conditioning is superior to split air conditioning in terms of energy efficiency and use effect. We believe that under the background of consumption upgrading and fine decoration penetration, the penetration rate of central air conditioning is expected to be further improved. From January to February 2022, the domestic market scale of central air conditioning was 14.9 billion yuan, a year-on-year increase of + 45.20%. Multi online central air is the leading model of central air conditioning, which saves more external space and makes more reasonable refrigerant distribution. From January to February 2022, the domestic sales volume of multi online central air is 8.5 billion yuan, a year-on-year increase of + 56.31%. We continue to be optimistic about central air conditioning, especially the growth of multi online.
Profit forecast and valuation
Considering the company’s traditional ice washing and household air conditioning business, the brand continues to go to sea; In terms of central air conditioning, considering that Hisense Hitachi under the company is the leader of the central air conditioning industry, its market position is stable. We expect the company’s revenue to be 79.1/86.8/95 billion yuan from 2022 to 2024, with a corresponding growth rate of 17.11% / 9.73% / 9.37%; The net profit attributable to the parent company was 1.263/1.579/1.917 billion yuan, with a corresponding growth rate of 29.83% / 25.04% / 21.40%, corresponding to 12 / 9 / 8 times of the current share price PE respectively. We give the company a 22-year 15xpe, corresponding to the target share price of 13.90 yuan, and give a “overweight” rating.
Risk tips
The price rise of raw materials exceeded expectations; The demand is less than expected; Intensified market competition
