\u3000\u3 Bohai Water Industry Co.Ltd(000605) 336 Zhejiang Sanfer Electric Co.Ltd(605336) )
Core view
The annual revenue growth was beautiful, and the performance was under pressure in the fourth quarter. In 2021, the company achieved a revenue of 978 million / + 36.93%, a net profit attributable to the parent company of 247 million / + 26.95%, and a net profit not attributable to the parent company of 225 million / + 25.58%. In the fourth quarter, the revenue was 291 million / + 18.73%, the net profit attributable to the parent was 63 million / – 9.85%, and the net profit not attributable to the parent was 61 million / – 8.74%. The company plans to pay a cash dividend of 13.9 yuan (including tax) for every 10 shares, and increase 3 shares with capital reserve for every 10 shares. The dividend rate is 5.6% based on the closing price of the day. The company’s annual revenue grew strongly, the performance was affected by the cost of raw materials, and the profit fell in the fourth quarter.
Strengthen channel upgrading marketing, and the single store revenue of dealers increased by 30%. In 2021, the company comprehensively upgraded its operation and management from six aspects: brand building, product R & D and upgrading, quality innovation and upgrading, marketing network construction, management organization structure optimization and enterprise information construction, so as to achieve strong growth of revenue. In 2021, the company’s integrated stove revenue increased by 34.58% to 904 million. Distribution channels: 1) distribution channels: the company has added more than 100 distributors and sales terminals. By the end of 2021, it has nearly 1300 distributors and more than 1600 sales terminals, including more than 300 shuaifeng fourth generation image stores, and 50 stores in the first and second tier cities. In 2021, the company’s single store shipment of dealers increased by 29.1% to about 560000 yuan, and the distribution revenue increased by 37.7% to 890 million yuan. 2) Online channel: the company added JD self operated store, tmall platform continued to work, and online revenue increased rapidly. In 2021, the company’s e-commerce revenue increased by 16.8% to 66 million. According to ovicloud, the listing share of shuaifeng integrated kitchen line increased by 1.6pct to 6.4% in 2021. 3) Emerging channels: the company organizes professionals to assist dealers to cooperate with KA, home decoration and engineering, quickly promote multi-channel development and deeply tap the market potential. Tiktok, China’s CCTV and high speed rail companies, and other new media methods such as jitter, red book, and TV drama implantation, variety implant and other new media methods are constantly increasing.
Affected by raw materials, the gross profit margin has improved month on month, and the profitability is still high. Affected by the high price of raw materials, the company’s gross profit margin fell by 3.0pct to 46.2% in 2021 and 3.6pct to 45.2% in Q4. However, compared with Q3, the gross profit margin fell by 7.2pct month on month, and the impact of raw materials has been improved month on month. The company’s expense rate remained basically stable, and the sales / R & D / management / financial expense rate in 2021 was – 0.5 / + 0.4 / + 0.4 / – 0.5pct to 12.3% / 4.2% / 4.7% / – 2.6% respectively; Q4 company’s sales / R & D / management / financial expense ratio is – 1.3 / + 0.6 / + 2.6 / – 0.2pct respectively. The company’s net profit margin in 2021 decreased by 2.0pct to 25.2%; Q4 net interest rate fell 6.8pct to 21.5%, and profitability remained at a high level.
Risk warning: industry competition intensifies; The price of raw materials fluctuates greatly; The channel construction was not as expected.
Investment suggestion: lower the profit forecast and maintain the “buy” rating.
Considering that the price of raw materials remains high in the near future and the guidance of the company’s equity incentive, the profit forecast is lowered. It is estimated that the net profit attributable to the parent company will be RMB 300 / 4.0 / 470 million from 2022 to 2024 (the previous value was RMB 340 / 4.5 / 530 million), with a year-on-year growth rate of 21.5% / 33.7% / 18.2%; Diluted EPS = 2.11/2.82/3.33 yuan, the current share price corresponds to PE = 12 / 9 / 8x, maintaining the “buy” rating
