\u3000\u3 China Vanke Co.Ltd(000002) 572 Suofeiya Home Collection Co.Ltd(002572) )
Event: the company achieved an operating revenue of 10.407 billion yuan in 2021, a year-on-year increase of + 24.59%; The net profit attributable to the parent company was 123 million yuan, a year-on-year increase of – 89.72% (the company made a total withdrawal of 909 million yuan for the amount receivable from Evergrande group, if this effect is excluded, a year-on-year increase of – 13.48%). Among them, Q4 revenue was 3.163 billion yuan, a year-on-year increase of – 2.92%; Q4 lost 726 million yuan and made 495 million yuan in the same period last year.
Strengthen assessment, improve terminal competitiveness and promote rapid growth of retail business. In 2021, the company’s retail and bulk channels achieved revenue of RMB 8.702 billion and RMB 1.606 billion respectively, with a year-on-year increase of + 27.77% and + 6.64% respectively. Retail H2 increased by + 13.15% year-on-year under the high base, continuing the growth trend since the first half of the year. The rapid growth of retail channels is mainly due to: 1) the continuous improvement of customer unit price in traditional retail channels promotes the increase of store efficiency. Since 2019, the company has started strategic transformation, strengthened the assessment and elimination of dealers, and effectively improved the terminal competitiveness, which is the main reason for the return of retail business to growth; 2) The whole packaging business has developed rapidly, with an annual revenue of 529 million yuan, a year-on-year increase of 3 times, and there is still broad space in the future. The decline of bulk business due to the significant reduction of cooperation with Evergrande in 2021h2 is the main reason for the slight decline of Q4’s overall revenue. It is expected that the bulk business will be flat in 2022 and grow steadily in the future. Considering that the bulk revenue accounts for about 15%, the impact on the overall revenue is limited. We believe that the strong foundation of the company’s marketing network and the improvement of management ability will drive the sustainable development of traditional retail. At the same time, the packaged business will also become an important growth point of the company, and the large retail channel can promote the overall rapid growth of the company.
The brand positioning is clearer, and the big home strategy is expected to drive the rapid development of multiple categories. By category, the income of wardrobe and accessories, cabinet accessories and wooden doors was 8.269 billion yuan, 1.420 billion yuan and 458 million yuan respectively, with a year-on-year increase of 23%, 17% and 57%. Benefiting from the optimization of the retail management system and the development of the whole decoration, the wardrobe still maintains a rapid growth under the high base. At the same time, the category synergy drives the development of cabinets and wooden doors. In 2021, the company will reposition the brand according to consumer groups rather than categories, and the category coordination within the brand will be smoother than between brands. From the perspective of brand, Suofeiya Home Collection Co.Ltd(002572) brand positioning is medium and high-end. In 2021, the number of stores increased by 11 to 2730, and the customer unit price increased by 9.63% year-on-year. At present, it has moved towards the whole customization, and the category boundary has been further expanded to software and household appliances; Simi is positioned as a high-end store, and the number of stores has increased from 14 to 1122, transforming from focusing on cabinets to full house customization; Milanna is positioned to be younger. It began independent investment promotion in April 2021. At present, there are 360 dealers and 212 stores. At present, the large household system with multiple brands and full categories has been sorted out clearly, and the new categories are expected to expand rapidly, boosting the company’s sustainable growth.
The risk of credit impairment is fully released, and the profitability is under pressure in the short term. The provision for impairment of the company’s receivables from Evergrande group amounted to 909 million yuan, accounting for 77% of the total amount. Considering that some of the receivables from Evergrande are exchanged for real estate and Evergrande has restructuring opportunities, we believe that the amount not withdrawn is more likely to be recovered and the risk of credit impairment has been fully released. In 2021, the company’s gross profit margin was 33.21%, with a year-on-year decrease of 3.35pct, mainly due to the rise of raw material prices and the surge of SKUs in the multi brand transformation period. At present, the company has cancelled many drainage designs and colors with low acceptance, and the price of raw materials such as sectors has declined since 2022. Therefore, we believe that the pressure on the company’s gross profit margin is expected to be relieved. Sales expense rate and management expense rate are + 0.53pct and -0.31pct respectively. The increase of sales expense rate is mainly due to the large cost investment in Q4 when the company launched the whole product, which is expected to be improved in the future. In the future, the main factors such as the continuous rise in the cost of raw materials and the rise in the overall profitability of raw materials are expected to be fully mitigated.
We are optimistic about the continuous growth of the company’s investment system and remarkable achievements. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1430 million, RMB 1727 million and RMB 2099 million respectively, with growth rates of 106673%, 20.78% and 21.51% respectively. At present, the corresponding PE of the stock price is 12.75, 10.59 and 8.74 times respectively, maintaining the “recommended” rating.
Risk tip: the recovery of real estate sales was less than expected, the price of raw materials fluctuated sharply, and the epidemic situation exceeded expectations
