\u3000\u30 China Baoan Group Co.Ltd(000009) 21 Hisense Home Appliances Group Co.Ltd(000921) )
Event: Hisense Home Appliances Group Co.Ltd(000921) released the first quarterly report of 2022. The company achieved revenue of 18.3 billion yuan in Q1 of 2022, yoy + 31.4%; Achieved a performance of 270 million yuan, yoy + 22.1%. Q1 Hisense Home Appliances Group Co.Ltd(000921) air conditioning business revenue maintained rapid growth, ice washing business revenue increased slightly, and single quarter revenue grew steadily; The company continued to optimize the product structure and channel layout, actively took measures to deal with the cost pressure of raw materials, and gradually restored its profitability.
In Q1, the growth rate of household air-conditioning revenue increased, and the growth rate of ice washing revenue decreased: Q1 Hisense Home Appliances Group Co.Ltd(000921) household air-conditioning revenue increased by about 37% year-on-year, and ice washing revenue increased by a small single digit year-on-year. In terms of business: 1) in terms of household air conditioning, the company continued to improve the product matrix, vigorously developed key markets and improved the sales structure. The household air conditioning business achieved better growth than the industry. For reference, according to the industry online data, from January to February 2022, the domestic and export shipments of the company’s household air conditioners were yoy + 22.2% / + 29.7%, while the domestic and export shipments were yoy-4.4% / + 4.7%. 2) In terms of ice washing, affected by the high base and tight shipping capacity in the same period last year, we judge that the ice washing business revenue of Q1 company increased slightly year-on-year. According to industry online data, from January to February 2022, the company’s domestic and export shipments of refrigerators were yoy + 0.0% / + 5.5% (compared with + 37.1% / + 81.1% in Q1 last year). Looking forward to the follow-up, Hisense Home Appliances Group Co.Ltd(000921) continues to improve its marketing ability, develop key markets and focus on emerging channels. The revenue scale is expected to grow steadily.
Q1 central air revenue continued to grow rapidly: Q1 Hisense Home Appliances Group Co.Ltd(000921) central air conditioning revenue increased by about 30% year-on-year. According to industry online data, from January to February 2022, Hisense Hitachi central air conditioning sales yoy + 32.4%. The demand for quality of life continues to promote the penetration of household central air conditioning. Hisense Hitachi not only has the technical advantages and brand influence of Hitachi, but also has Hisense’s perfect sales service system in China. We believe that Hisense Hitachi is expected to fully benefit from the development dividend of household central air conditioning.
Q1 single quarter profitability gradually improved: Q1 Hisense Home Appliances Group Co.Ltd(000921) gross sales difference was + 0.4pct year-on-year and + 0.2pct month on month, of which gross profit margin was – 2.2pct year on year and + 3.1pct month on month. The company’s raw material cost pressure has eased, mainly because: 1) the company adopted a balanced production strategy at the end of last year, and prepared finished products and locked the price of raw materials in advance; 2) The operation efficiency of our home air-conditioning company has been adjusted and the operation efficiency of our home air-conditioning Department has been improved.
The net outflow of operating cash flow in Q1 has expanded: Hisense Home Appliances Group Co.Ltd(000921) Q1 net operating cash flow in a single quarter was – 200 million yuan, compared with – 50 million yuan in Q1 last year. The company’s operating cash flow decreased, mainly due to the continuous rise in the price of Q1 raw materials and the expansion of business scale, the company’s goods preparation expenditure increased, and the cash paid by Q1 company for purchasing goods and receiving labor services was yoy + 48.1%.
Investment suggestion: the growth space of the central air industry is large, and the leading Hisense Hitachi is expected to benefit from the development of the industry for a long time. Subsequently, the company’s valuation is expected to improve with the gradual restoration of profitability driven by the easing of raw material price pressure. At present, the company is continuously integrating Sandian holdings, which will help the company enter the field of automobile air conditioning compressor and automobile air conditioning system, open up new market space, and is expected to have synergy with the company’s existing business. It is estimated that the company’s EPS will be 0.5% from 2022 to 202496 / 1.13/1.31 yuan, with an investment rating of buy-a. the six-month target price is 13.41 yuan, equivalent to 14 times the dynamic P / E ratio in 2022.
Risk tip: trade barriers have intensified, the RMB exchange rate has appreciated significantly, and the cost of raw materials has risen sharply
