\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 48 He Bei Cheng De Lolo Company Limited(000848) )
Event: the company disclosed the annual report of 2021. In 2021, the company achieved a revenue of 2.52 billion yuan, a year-on-year increase of + 35.7%; The net profit attributable to the parent company was 570 million yuan, a year-on-year increase of + 31.8%; The net cash flow from operating activities was 690 million yuan, a year-on-year increase of + 81.8%. 4q21 achieved a revenue of 670million yuan, a year-on-year increase of +39.5%; The net profit attributable to the parent company was 170 million yuan, a year-on-year increase of + 28.2%. The performance exceeded our expectations.
Key points supporting rating
The annual performance increased rapidly, and the revenue growth accelerated in the fourth quarter. (1) In 2021, the company's performance increased rapidly and the reform results showed. On the product side, the sales volume of main products continued to grow, and the revenue of almond dew series products was 2.47 billion yuan, a year-on-year increase of + 34.8%; The promotion of new products has achieved remarkable results, with the revenue of nut and walnut series products of 49.15 million yuan, a year-on-year increase of + 301%. On the channel side, the company continued to promote the deep cultivation of the existing market and the expansion of new channels. In 2021, the number of dealers in northern China reached 459, a net increase of 37, and that in other regions reached 51, a net increase of 18, a year-on-year increase of + 54.6%. In addition, under the influence of the epidemic in 2020, the company's performance base is low, the epidemic eased in 2021, and the sales channels and consumption scenes have been restored. (2) In addition to the effective factors of reform, we judge that the acceleration of revenue growth of 4q21 company is also related to the low base of 4q20 and the advance of Spring Festival in 2022.
The rising price of raw materials affects the profit margin, and the overall cost rate is stable and declining. (1) In 2021, the price of bulk commodities continued to rise, with the company's gross profit margin of 46.8%, year-on-year -3.3pct, and the net profit attributable to the parent company of 22.6%, year-on-year -0.7pct. (2) The overall cost rate has decreased steadily, and the intensity of advertising has increased. In 2021, the company's sales expense ratio was 15.3%, with a year-on-year increase of -0.1pct. In terms of absolute amount, the sales expenses increased by 34.8% year-on-year, mainly due to the increase of advertising expenses, promotion expenses and salesperson's salary, of which the advertising expenses increased by 63.6% year-on-year. In 2021, the company's management expense ratio was 1.7%, year-on-year - 1.2pct, and the R & D expense ratio was 0.7%, year-on-year + 0.2pct.
Outlook: the epidemic situation and the price fluctuation of raw materials will bring short-term disturbance, and the logic of long-term growth will remain unchanged. (1) In the short term, the continuous multi-point spread of the epidemic has a negative impact on the company's sales, and the high commodity prices have brought cost pressure to the company. We judge that the growth rate of 1q22 performance is not fast. If the epidemic situation eases in the second and third quarters and the influence of seasonal factors is eliminated, the performance growth is expected to accelerate month on month driven by the large volume of new products and channel expansion. (2) In the long run, the Growth Logic of the company's product development and channel expansion remains unchanged. On the product side, the sales of almond dew products have a solid foundation, and new products such as nuts and walnuts will create new growth points. On the channel side, the company will promote the deep cultivation of the existing market and the development of blank market. The e-commerce channel and the southern market are expected to become a new growth curve.
Valuation
According to the annual report, we revised the previous profit forecast and expected EPS of 0.64, 0.76 and 0.90 yuan in 22-24 years, with a year-on-year increase of + 21.5%, + 18.2% and + 17.9%, maintaining the buy rating.
Main risks of rating
The impact of the epidemic exceeded expectations, the price of raw materials fluctuated, and the expansion of new products was less than expected.
