\u3000\u3 Bohai Water Industry Co.Ltd(000605) 336 Zhejiang Sanfer Electric Co.Ltd(605336) )
Key investment points
Performance summary: in 2021, the company achieved a revenue of 980 million yuan, a year-on-year increase of 36.9%; The net profit attributable to the parent company was 250 million yuan, a year-on-year increase of 26.9%. In a single quarter, Q4 company achieved a revenue of 290 million yuan, a year-on-year increase of 18.7%; Under the influence of the rise of raw materials and amortization of expenses, the company realized a net profit attributable to the parent company of 60 million yuan, a year-on-year decrease of 9.8%. The company plans to distribute cash dividends of RMB 13.9 per 10 shares to shareholders, totaling about RMB 200 million, with a dividend rate of 80.2%, and the company plans to increase 3 shares per 10 shares to shareholders with capital reserve.
The sales volume of steaming and baking is leading, and the annual revenue increases rapidly. As one of the fastest growing segments of the kitchen and bathroom market, integrated stoves have maintained a super double-digit growth rate for many years. According to the total data pushed by ovicloud, the retail volume of integrated stoves was 3.04 million in 2021, a year-on-year increase of 28%; Retail sales reached 25.6 billion yuan, a year-on-year increase of 41%. As one of the high-quality enterprises of integrated stoves, the company has continuously strengthened the iteration of product renewal and accelerated the construction of channel diversification. In the whole year, the revenue has achieved rapid growth. By the end of the reporting period, the company had 17 integrated steaming and baking stoves. According to the data of Ourui international, the company’s integrated oven for steaming and baking has led the national sales for three consecutive years. During the double 11, the T6 and J2 products of the company won the sales crown of tmall and jd.com steaming and baking independent products respectively, and the T1 products won the sales crown of tmall steaming and baking integrated products for two consecutive years.
Wuxi Online Offline Communication Information Technology Co.Ltd(300959) coordinate development and build a diversified channel network. The company has built a diversified channel layout, with offline specialty stores as the core, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) coordinated development, and entered Ka, home decoration and other channels at the same time. In terms of offline channels, the company continued to empower dealers, adding and transforming more than 300 specialty stores during the reporting period. At present, the company has nearly 1300 dealers and more than 1600 sales terminals, realizing the full coverage of key cities in China. On line, the company increased its investment in Tmall and Jingdong platforms during the reporting period, while actively promoting live sales tiktok and other content e-commerce platforms.
Profitability has declined. Throughout the year, affected by the rise in the price of raw materials, the company’s comprehensive gross profit margin was 46.2%, down 3PP year-on-year. In terms of expense ratio, the company’s sales expense ratio decreased by 0.5pp to 12.3% year-on-year; The management expense ratio was 8.9%, with a year-on-year increase of 0.8pp; The financial expense ratio was – 2.6%, a year-on-year decrease of 0.5pp. Overall, the company’s net interest rate was 25.2%, down 2PP year-on-year.
Q4 profitability is under pressure. According to the data of a single quarter, the gross profit margin of Q4 was 45.2%, a year-on-year decrease of 3.6pp; The net interest rate was 21.5%, a year-on-year decrease of 6.8pp. The company’s Q4 short-term profit is under pressure. We believe that there are three main reasons: (1) happy comedians and big brands amortized some expenses in Q4; (2) The impact of rising raw material prices; (3) Due to the impact of cold real estate and high base, the growth rate of Q4 revenue of the company slowed down, and the proportion of Q4 revenue of the company reached 36% in 2020.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 2.05/2.55/3.22 yuan respectively. Considering the rapid increase of the penetration rate of integrated stoves, the company continues to strengthen the construction of product channels, which is expected to fully benefit from the industry dividend and maintain the “buy” rating.
Risk warning: the risk of raw material price or sharp fluctuation, and the risk of terminal sales falling short of expectations.
