\u3000\u3 Shengda Resources Co.Ltd(000603) 657 Jinhua Chunguang Technology Co.Ltd(603657) )
Event: in 2021, the company achieved an operating revenue of 1.295 billion yuan, a year-on-year increase of + 51.59%, and a net profit attributable to the parent company of 110 million yuan, a year-on-year increase of – 22.47%; Among them, 2021q4 achieved an operating revenue of 433 million yuan, a year-on-year increase of + 45.92%, and a net profit attributable to the parent company of 21 million yuan, a year-on-year increase of – 57.16%. Cash dividend of 0.30 yuan per share (including tax).
The growth rate of the whole machine business is bright, and the traditional business is growing steadily: in 21 years, the company’s vacuum cleaner hose and accessories revenue was 880 million, a year-on-year increase of + 3.6%, and the new whole machine OEM business was 410 million, accounting for 32% of the total revenue. Among them, the revenue of 21h2 hose and accessories was 420 million, a year-on-year increase of – 24.5%, and the OEM business of complete machine was 320 million, a significant increase from 90 million yuan in the first half of the year. In the second half of the year, the revenue of the company’s hose and accessories business declined. We believe that on the one hand, the rise in the price of raw materials and the impact of shipping have restrained customers’ orders, on the other hand, the overseas epidemic has a certain impact on the normal production of overseas factories. The sharp increase in the whole machine business is mainly due to the company’s entry into the floor washing machine OEM market in 21 years, binding with core major customers such as chase and Shunzao. At the same time, the company also OEM the whole machine of clean appliances for Midea, uwant and other brands, adding the positive contribution of the double 11 National Congress in the second half of the year, resulting in the rapid growth of the whole machine business of the company.
The company increased the investment in complete machines, and the cost and provision affected the profit level: in 2021, the gross profit margin of the company was 20.7%, year-on-year -9.82pct, and the net profit margin was 8.26%, year-on-year -8.42pct; The gross profit margin of 2021q4 was 16.45%, year-on-year -12.61pct, and the net profit margin was 4.41%, year-on-year -11.97pct. From the perspective of subsidiary companies, the net profits of Vietnam CGH company / Vietnam suntone company / Suzhou shangteng company are all negative. There are several reasons for the decline of the company’s profit level: 1. In 2021, due to the large price rise of ABS and other bulk materials, the cost of raw materials will change greatly. 2. The company has newly developed the OEM business of complete machine in 21 years, so it needs to invest a certain cost in the investment of complete machine mould and R & D personnel. 3. due to the low exchange rate of USD, the exchange loss of the company involving overseas business is also expected to have a certain impact. In addition, we expect that since the company has factories overseas and needs to bear the freight, the cost of sea freight may also be partially affected. The company previously disclosed the audit statement of its subsidiary Suzhou shangteng, and the total accrued expenses of shangteng were -10.072 million yuan (asset impairment + credit impairment). If the accrued expenses are restored, the net profit of shangteng is 2.224 million yuan, and the net profit attributable to the parent company is 120 million yuan, a year-on-year increase of – 15.6%.
In 2021, the company’s sales, management, R & D and financial expense rates were 1.03%, 5.86%, 3.54% and 0.74% respectively, with a year-on-year increase of -0.08, -0.82, + 0.35 and + 1.1pct; In the quarter of 21q4, the rates of sales, management, R & D and financial expenses were 0.63%, 3.99%, 4.12% and 2.38% respectively, with a year-on-year increase of -0.27, – 1.29, + 1.55 and + 1.87pct. The company’s financial expense ratio increased significantly, mainly due to the increase of interest expenditure and the decrease of interest income. The increase of Q4 R & D expenses of the company was mainly due to the increase of R & D expenses of the whole machine throughout the year, with a year-on-year increase of + 68.41%, of which the R & D investment of Suzhou shangteng, a holding subsidiary, was 107023 million yuan, accounting for 23.4% of the total R & D investment.
Investment suggestion: the company previously disclosed its acquisition plan for Suzhou shangteng subsidiary, which fully shows its attention to the whole machine business and confidence in growth. At present, the company binds multiple core customers, and the future order volume is guaranteed. At the same time, the company actively expands the scale of production capacity to ensure sufficient production capacity to meet the flexible order demand of customers. According to the company’s annual report and performance express for the 21st year, we will not change the forecast for the previous 22-23 years. It is estimated that the net profit of the company from 2022 to 2024 will be 174 / 228 / 284 million yuan respectively (the value before 22-23 years is 173 / 228 million yuan); The corresponding dynamic valuations are 13.6x, 10.4x and 8.3x respectively. Maintain the “buy” rating.
Risk warning: raw material price fluctuation risk; Market competition risk; Risk of substitute products; exchange-rate risks; The OEM penetration rate is lower than expected.
