\u3000\u3 China Vanke Co.Ltd(000002) 572 Suofeiya Home Collection Co.Ltd(002572) )
Event: the company announced in its 2021 annual report that in 2021, it realized an operating revenue of 10.407 billion yuan, a year-on-year increase of 24.59%; The net profit attributable to the parent company decreased by 2.389 billion yuan year-on-year; Among them, the operating revenue in the fourth quarter was 3.163 billion yuan, a slight decrease of 2.92% year-on-year; The net profit attributable to the parent company was -726 million yuan, a year-on-year decrease of 246.66%.
Core view
In the fourth quarter, the bulk dragged down revenue, and retail sales made steady efforts. In 2021, the total revenue of the company exceeded 10 billion, close to the upper limit of the previously announced performance forecast. (1) Sub channels: in 2021, the company’s distribution / bulk / direct channels achieved revenue of RMB 8.360/3.42/1.604 billion respectively, with a year-on-year growth rate of 28% / 7% / 37%, of which the revenue of packaged channels reached RMB 529 million in 2021, realizing rapid volume. In the fourth quarter alone, the revenue side of the company decreased by 3% year-on-year, mainly due to the impact of the structural adjustment of bulk business customers. The bulk revenue in 2021q4 decreased by 42% year-on-year, under short-term pressure; In 2021q4, the revenue from distribution and direct sales channels increased by 8% and 17% respectively year-on-year, and retail sales were robust. (2) By product, in 2021, the company’s wardrobe and accessories / Cabinets / wooden doors achieved revenue of RMB 8.269/14.20/458 billion respectively, with a year-on-year increase of 23% / 17% / 57% Suofeiya Home Collection Co.Ltd(002572) brand retail end sector upgrading and category integration promoted the increase of customer unit price (up to 14491 yuan / order at the end of 2021, with a year-on-year increase of 10%), superimposed with the rapid and large-scale volume of packaging channels, driving the steady growth of wardrobe revenue; It is speculated that the high growth of wooden door is due to the joint contribution of retail opening and the recovery of the same store. In 2021, the number of Suofeiya Home Collection Co.Ltd(002572) , Huahe wooden door exclusive stores increased by 217 to 799, and the number of integrated stores increased by 173 to 804. The expansion of wooden door stores was smooth.
Profitability is under pressure in the short term, and the future repair space can be expected. 2021q4 achieved a gross profit margin of 28.75%, a year-on-year decrease of 5.46pct, mainly due to the rise in the price of bulk raw materials, but the company did not adjust the product price at the same time, the rapid increase of product SKU, the rapid expansion of the company’s direct packaging, milanna and other businesses, resulting in the reduction of production efficiency and other factors. In addition, in order to cooperate with the promotion of new business, the company’s advertising and marketing efforts have been increased accordingly. The sales expense rate of 2021q4 was 10.07%, an increase of 3.50pct year-on-year. In 2021q4, the net interest rate attributable to the parent company was – 22.96%, mainly due to the impact of Evergrande’s credit impairment (about 909 million yuan). After excluding, the net interest rate attributable to the parent company was about 5.78%, a year-on-year decrease of 9.42pct under comparable standards. As the price of bulk raw materials stabilizes and falls in the future, the adjustment and upgrading of terminal product structure will be implemented, and the profitability of the company is expected to be gradually repaired.
The strategy of “all channels, multi brands and all categories” has been continuously promoted, and the development momentum of the company is good. By the end of 2021, the whole customized strategy of the company was implemented. The integrated space solution helps to continuously promote the integration of categories, and the growth of retail channels is expected to accelerate; Relying on the cooperation of dealers and the direct signing mode of the company, the whole packaging channel is gradually opened, and the high income growth trend is expected to continue; Milanna brand focuses on young, fashionable and cost-effective products. At present, it is in the stage of rapid channel expansion and is expected to contribute to a new growth point of revenue.
Profit forecast and investment suggestions
By lowering the growth rate of bulk business income and the assumption of gross profit margin, it is predicted that the net profit attributable to the parent company in 20222024 will be RMB 1.373/1.684/1.966 billion respectively (previously predicted to be RMB 1.684/1.943 billion respectively in 20222023). In combination with comparable companies, the company gave a valuation of 16 times P / E ratio in 2022, corresponding to the target price of 24.08 yuan, maintaining the “buy” rating.
Risk tips
The risk that the completion and sales of the real estate are less than expected; Risks of intensified industry competition; Risk of significant impairment of accounts or notes receivable in bulk business
