\u3000\u3 Shengda Resources Co.Ltd(000603) 180 Goldenhome Living Co.Ltd(603180) )
Event: the company released its annual report for 2021. In 2021, the company achieved a revenue of 3.448 billion yuan, a year-on-year increase of 30.61%, and a net profit attributable to the parent company of 338 million yuan, a year-on-year increase of 15.49%. The company plans to distribute a cash dividend of 1.06 yuan per share (including tax).
Key investment points
The retail revenue of 21h2 was excellent, and the net profit attributable to the parent company of 21q4 reached a new high in a single quarter. On the revenue side, the company achieved revenue of 3.448 billion yuan / + 30.61% in 2021, with a growth rate of 6.4pct higher than that in 2020. The continuous growth of sales volume of kitchen cabinets and wardrobe categories was the main driving force for revenue growth. Quarter by quarter, 21q1 / Q2 / Q3 / Q4 achieved revenue of RMB 490 million, RMB 840 million, RMB 890 million and RMB 1.23 billion respectively, with a year-on-year increase of 81.6% / 49.9% / 13.5% / 19.9%. The slowdown in the second half of the year was due to the impact of bulk business. The bulk business of 21q3 / Q4 company increased by 14.1% and 0.4% year-on-year, which was significantly lower than the 88.7% growth rate of 21h1. We estimate that the company’s retail business 21h2 increased by 20% year-on-year, and the retail performance was excellent. On the net profit side, in 2021, the company realized the net profit attributable to the parent company of 338 million yuan / + 15.49%, and the net profit attributable to the parent company of 21q4 was 180 million yuan / + 24.9%. The net profit attributable to the parent company in the fourth quarter was the highest in a single quarter since the company was listed.
The wardrobe business expanded rapidly, accounting for more than 20% of the revenue in 21 years. In 2021, the company actively promoted the channel layout of kitchen, clothing, wood, electrical appliances and other categories. The retail business of kitchen cabinet achieved steady growth, and the retail business of wardrobe and wooden door achieved rapid growth. In 2021, the company’s overall kitchen cabinet, overall wardrobe, wooden door and other supporting products achieved revenue of RMB 2.48, 8.0, 8.0 and 20 million respectively, with a year-on-year increase of 19.6%, 60.3%, 242.2% and 121.1%. Kitchen cabinet is the largest revenue of the company, accounting for 71.9%, but the proportion decreased by 6.6pct year-on-year. Wardrobe is the second largest revenue of the company. In 2021, the revenue accounted for more than 20%, reaching 23.2%. In terms of split volume and price, the sales volume of wardrobe of the company increased by 46.5% year-on-year, and the average sales unit price increased by 9.4%. The volume and price increased simultaneously throughout the year. In 2021, the sales volume of wooden doors increased by more than 400% year-on-year, accounting for 2.4% of the revenue, with a year-on-year increase of 1.5pct. In terms of other supporting products, the revenue accounted for 0.5% in 2021. In terms of kitchen cabinet supporting, it is expected that the company will cooperate with kitchen power enterprises this year. In terms of wardrobe supporting, the company will continue to strengthen product supporting, layout the whole customization, meet consumers’ one-stop shopping demands and enhance the value of single customers. In December 21, the company officially released the gold medal G9 Gaoding brand in Guangzhou design week, laying out the field of high-end private customization.
In the past 21 years, all kinds of stores have been steadily expanded, and the whole packaging channel will be adjusted before starting. In terms of sub channels, 1) in terms of dealer channels, the company achieved a revenue of 1.88 billion yuan in 2021, with a year-on-year increase of 33.3%, accounting for 54.5%. By the end of 21, the company had 3062 distribution stores, including 1720 Goldenhome Living Co.Ltd(603180) stores, 919 gold medal wardrobe stores, 388 gold medal wooden door stores and 35 gold medal decoration stores. In 21 years, the company’s distribution stores expanded steadily, with a net increase of 166, 197 and 207 kitchen / clothing / wood stores and 30 decoration stores compared with the beginning of the year, It is expected that in the next 22 years, relying on the platform branches and offices, the company will further strengthen the business district management of retail channels and stimulate the vitality of retail channels. 2) In terms of direct marketing channels, the revenue in 2021 was 190 million yuan, with a year-on-year increase of 0.8%, accounting for 5.6%. There were 31 offline stores, which was the same as that at the beginning of the period. 3) In terms of bulk channels, in 21 years, the company strengthened strategic cooperation with real estate enterprises such as central enterprises, local state-owned enterprises and high-quality private enterprises. During the year, the company signed strategic centralized purchase agreements with 45 top 100 real estate enterprises, realizing an annual revenue of 1.14 billion yuan, a year-on-year increase of 28.2%. Affected by the real estate industry, the expansion of engineering agent business slowed down in the second half of the year, resulting in a decline in the growth rate of bulk business revenue. 4) In terms of packaging channels, in the past 21 years, the company has actively adjusted and upgraded the packaging business model and sought cooperation with local head packaging enterprises.
The rise of raw materials has put pressure on the gross profit margin of bulk business, and the profitability of retail business is relatively stable. In terms of profitability, in 2021, the company’s gross profit margin decreased by 2.2pct to 30.5% year-on-year. The decline in the company’s profitability is mainly due to the erosion of the profitability of bulk business caused by the rise of raw material prices. The gross profit margin of bulk channel decreased by 5.2pct to 13.3% year-on-year. Due to the price increase of the company in July and October of 21, the gross profit margin of retail business (distribution + direct sales) was slightly damaged, with a year-on-year decrease of 0.8pct. In terms of expense rate, in 2021, the company’s expense rate during the period decreased by 0.3pct, of which the sales / management / R & D / financial expense rates were 11.8%, 4.6%, 5.1% and – 0.2% respectively. The sales and R & D expense rate was flat year-on-year, and the management expense rate decreased slightly. Under the comprehensive impact, the company’s net interest rate in 2021 was 9.7%, down 1.3pct year-on-year. In terms of inventory, by the end of the year, the company’s inventory was 470 million yuan / + 57.4%, and the number of inventory turnover days was 58 days, an increase of 3 days year-on-year. In terms of cash flow, in 2021, the net cash flow of the company’s operating activities was 400 million yuan, a year-on-year decrease of 40.1%. The development of multiple categories led to the increase of raw material procurement varieties, and the company appropriately increased the inventory of raw materials in response to the epidemic and the rise of raw materials, resulting in a large increase in procurement volume year-on-year.
Investment suggestion: in the past 21 years, the company’s whole category business has been steadily promoted, the performance of kitchen cabinets has been stable, the relay of wardrobe and wooden door business has increased rapidly, and the operation is stable under the mode of bulk channel agents. We predict that the company’s earnings per share from 2022 to 2024 will be 2.73 yuan, 3.19 yuan and 3.66 yuan respectively, which corresponds to 12 times of the company’s PE in 22 years. It will be covered for the first time, and we will give the suggestion of “shareholding INCREASE-A”.
Risk warning: the completion and sales data of commercial housing are not as expected; Industry competition intensifies; The shop opening progress is not as expected; Risk of sharp fluctuations in raw material prices; The impact of the epidemic exceeded expectations.
