\u3000\u30 China Baoan Group Co.Ltd(000009) 21 Hisense Home Appliances Group Co.Ltd(000921) )
Event: the company released the first quarterly report of 2022. In Q1, the operating revenue reached 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%.
Comments:
Q1 has excellent performance in single quarter and brilliant export performance. The company’s Q1 single quarter performance was excellent. On the one hand, Hisense Hitachi’s net profit achieved a good growth. On the other hand, the sharp loss reduction of household air conditioning business also raised the overall profit level. From a regional perspective, 1) domestic sales: affected by the slow recovery of China’s household power market demand, the company’s domestic sales in Q1 was under pressure as a whole in a single quarter, with only a small single digit growth. According to industry online, from January to February, the sales volume of air and ice washing in China was – 4.4% / + 0.1% / – 3.8% year-on-year respectively, and the domestic sales performance of household appliances was weak as a whole; 2) Export: the company’s export performance is good. According to the industry online, the export growth rate of Hisense household air conditioner and refrigerator from January to February was + 29.7% / + 5.5% respectively, which is significantly better than the industry (the industry growth rate from January to February was + 4.7 / – 7.0% respectively). We believe that with the improvement of the epidemic situation, the Chinese market gradually recovers, and the company’s performance is expected to further improve.
The profit margin is under pressure in the short term, and the effect of fee control is good. In Q1, the company’s gross profit margin was 18.53% in a single quarter, with a year-on-year rate of -2.20pct and a month on month rate of + 3.06pct. The rise of bulk raw materials and sea freight put pressure on the company’s cost side, but the month on month rate improved. The company actively carried out expense control. During Q1, the expense rate was -1.44pct to 15.59% year-on-year, of which the expense rates of sales, management and R & D were -2.61pct / + 1.08pct / + 0.09pct to 10.47% / 2.31% / 2.81% respectively. The slight increase in the administrative expense rate was mainly affected by the film in consolidated statement III. under the comprehensive influence, the company’s annual net profit margin was -0.37pct to 3.12% year-on-year, and the decline in net profit margin was less than that of gross profit margin. The company’s expense control effect was good.
Short term cash flow is under pressure and operating efficiency is relatively stable. In Q1, the net operating cash flow of the company was -203 million yuan (compared with -52 million yuan in the same period last year). The decrease in operating cash flow was mainly due to the rise in the price of raw materials and the increase in the company’s raw material preparation expenses. In terms of operating efficiency, the company’s inventory turnover days increased by 7.53 days to 49.72 days from 42.19 days in the same period last year, mainly because the company actively prepared goods and locked the inventory of finished products and raw materials in advance in order to alleviate the pressure on the cost side of raw materials. Overall, the operating efficiency of the company is relatively stable.
Investment suggestion: the company’s overseas business growth momentum is strong and maintains the “overweight” rating. The company has basically completed the integration of Sandian, and will gradually make efforts in the field of air conditioning compressor and thermal management. The overseas business will develop steadily. In the future, with the recovery of the domestic market of Daidian, the company’s profitability is expected to continue to improve. We maintain the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.54/18.2/1.99 billion respectively, corresponding to 10 / 9 / 8 times of the current market value PE, and maintain the “overweight” rating.
Risk tip: the channel reform is not as expected, the epidemic situation in China is repeated, and the price of raw materials is rising.
