\u3000\u3 China Vanke Co.Ltd(000002) 713 Dong Yi Ri Sheng Home Decoration Group Co.Ltd(002713) )
Event overview
The company released its annual report for 2021. In 2021, the company’s revenue was 4.292 billion yuan, a year-on-year increase of + 24.52%; The net profit attributable to the parent company was 78 million yuan, a year-on-year increase of – 57.00%; The net profit attributable to the parent company after deduction was 85 million yuan, a year-on-year increase of + 12.89%. Quarter by quarter, the company’s revenue in Q4 was 1.569 billion yuan in a single quarter, a year-on-year increase of – 4.12%; The net profit attributable to the parent company was 268 million yuan, a year-on-year increase of – 32.03%; The net profit attributable to the parent company after deducting non-profit was 269 million yuan, a year-on-year increase of -9.77%. The company continued to strengthen technology and product research and development, continuously increased marketing investment, and achieved rapid year-on-year growth in revenue. The slight year-on-year decline in Q4 revenue was mainly due to the impact of the high base in the same period last year; The year-on-year decline in the profit side was mainly due to the impact of changes in the non recurring profit and loss account and the increase in rental expenses caused by the company’s implementation of the new leasing standards. In terms of cash flow, the net cash flow from operating activities in 2021 was 156 million yuan, with a year-on-year increase of – 25.13%, of which the net cash flow from Q4 operating activities was – 61 million yuan, with a significant year-on-year decrease, mainly due to the increase of the company’s repayment of credit loans in the current period and the increase of rent paid under the new leasing standards..
Analysis and judgment:
Revenue side: the revenue of the company increased rapidly year-on-year in 21 years, and the supply chain channels of the whole decoration business continued to be rich. From the perspective of different industries, the revenue of the company’s home decoration, fine tooling, public clothing, licensing, sales, transportation and other businesses in 21 years was 3.703 billion yuan, 1.28 billion yuan, 3.34 billion yuan, 0.06 billion yuan, 0.17 billion yuan, 03 billion yuan and 100 million yuan respectively, accounting for 86.27%, 2.97%, 7.79%, 0.15%, 0.41%, 0.08% and 2.33% respectively, with a year-on-year ratio of + 22.95%, + 76.25%, + 34.17%, – 12.26%, + 25.98% and – 35.77% respectively +14.61%； Among them, the year-on-year high-speed growth of Seiko, and the rapid growth of home decoration and public decoration. In terms of packaging business, in the past 21 years, relying on its rich experience in home decoration service, supply chain and delivery capacity, the company has launched “three good packaging” products with good design, good price and good quality. It has successively opened 15 large packaging stores and independently designed and developed more than 100 sets of independent packaging cases. At present, the vertical supply chain of packaged products has accumulated 18 major products on sale, 4700 SKUs and 6800 SKUs in the regional supply chain. In terms of home decoration business, in the past 21 years, the company comprehensively upgraded the home decoration system and launched a new SaaS system for super assured home decoration. The SaaS system delivered by the whole decoration business has opened up the upstream and downstream business chain, service chain and data chain, with an overall on-time delivery rate of more than 95% and customer satisfaction of more than 9.5 points; The 360 ° delivery management Tianyan system of original delivery has realized the boundary division of agreement, contract and material requisition and mobilization. It monitors the delivery progress by household, customer online acceptance, change confirmation and other links. The overall on-time delivery rate has reached more than 90% and customer satisfaction has reached more than 9.5 points. In terms of products, the company continued to strengthen the research and development of indoor basic factory technology, recognized a number of patented technologies independently developed, optimized a number of construction processes and technologies such as drainage pipes, display cabinets, wall and floor, ceiling keel, and solved the hidden dangers of electrical safety of living rooms and residences, special-shaped family bathroom, electrical hygiene and other industrial pain points. Channel side, the company continues to deepen the digital marketing and content marketing layout, tiktok, red book, video frequency and other new social media platform precise drainage, we need to adjust the product mix and enhance the overall service experience; The brand side cooperates with tanyuanyuan, a world-class ballet artist, in the art publicity activities, and participates in the in-depth interaction of the national media column “national brand theory”, so as to continue to promote the Dong Yi Ri Sheng Home Decoration Group Co.Ltd(002713) brand to be younger and trendier.
Profit side: Q4 gross profit margin increased, and the sales expense rate increased due to increased investment
In 2021, the gross profit margin and net profit margin of the company were 34.99% and 2.77%, respectively -1.29pct and -3.53pct; Among them, the gross profit margin of the home decoration industry, which accounts for the largest proportion, was 32.34%, with a year-on-year decrease of -1.72pct, driving the overall gross profit margin of the company to decline slightly. The year-on-year decline of net profit margin was mainly caused by the higher amount of non recurring profit and loss in the same period of last year due to the benefit from the disposal of real estate for 20 years and the increase of leasing expenses under the new leasing standards. In terms of quarters, the gross profit margin and net profit margin of Q4 in a single quarter were 42.62% and 18.71% respectively, with a year-on-year increase of + 2.90pct and -6.23pct respectively, and a month on month decrease of + 8.80pct and + 24.50pct respectively. The sharp decline in the net profit margin of Q4 in a single quarter was mainly due to the increase of the company’s expenses during the period. In 2021, the company’s expense ratio was 30.67%, with a year-on-year increase of -0.65pct; The sales expense rate, management expense rate, R & D expense rate and financial expense rate were 18.12%, 8.11%, 3.94% and 0.51% respectively, with a year-on-year increase of + 0.05pct, -0.85pct, -0.34pct and + 0.49pct; Quarter by quarter, the company’s expense rate during Q4 single quarter was 22.53%, with a year-on-year increase of + 5.42pct, of which the sales expense rate, management expense rate, R & D expense rate and financial expense rate were 14.07%, 4.69%, 3.53% and 0.25% respectively, with a year-on-year increase of + 4.33pct, + 0.66pct, + 0.27pct and + 0.16ct respectively. The increase of sales expense rate is mainly due to the company’s increasing marketing investment and building a digital marketing operation management platform; The increase in financial expense rate was mainly due to the increase in unrecognized financing expenses caused by the company’s implementation of the new leasing standards for the first time.
Investment suggestions:
With the stable epidemic situation and the growth of the completed area of real estate, the demand for home decoration will gradually increase. The company has sufficient orders on hand, and introduces war investment Xiaomi technology to expand the fields of digital decoration and smart home, so as to support the growth of performance. Considering the strong demand for new house decoration and secondary transformation in the home decoration industry and the gradual promotion of the company’s digitization, we raised the forecast of the company’s revenue of 4.383 and 4.740 billion yuan from 22 to 23 to 4.749 and 5.423 billion yuan, and the revenue in 2024 was 6.244 billion yuan; Considering that the company is affected by factors such as the seasonality of the home decoration industry and the rise in the price of raw materials, the eps0 of 22-23 years is reduced The forecast of 50 / 0.55 yuan is 0.32/0.37 yuan, and the EPS in 2024 is 0.47 yuan. Corresponding to the closing price of 7.08 yuan / share on April 14, 2022, the corresponding PE of 20222024 is 23 times, 19 times and 15 times respectively, and the “buy” rating will continue to be maintained.
Risk tips:
1) risk of intensified market competition; 2) The development of new business is not as expected.
