\u3000\u3 Bohai Water Industry Co.Ltd(000605) 555 Ningbo Dechang Electrical Machinery Made Co.Ltd(605555) )
The company disclosed the annual report of 2021:
2021: revenue of 2.84 billion yuan (YoY + 38%), return to parent company of 300 million yuan (yoy-1%), deduct non-profit of 260 million yuan (yoy-3%); Corresponding to 2021q4: revenue of 620million (yoy-7%) and parent company of 80million (yoy-27%).
Revenue side:
By category: ① the revenue of vacuum cleaner related business is 2.24 billion, yoy + 35%, of which the revenue of floor washer OEM is 1.2 billion, yoy + 66%; ② Diversified small household electrical appliance business (including hair care and others) has achieved an income of 460 million, yoy + 22% ③ automobile motor has achieved an income of 3.71 million, 13 project fixed points have been realized, corresponding to the sales volume of 23 million units in the whole life cycle, and another 30 projects are under promotion.
From the perspective of key customers, the company achieved sales of 2.18 billion yuan to Chong Ke industry (TTI) in 2021, with yoy + 34%. Considering that the US dollar caliber of Chong Ke industry’s floor care and cleaning business increased by about 15%, the supply proportion of the company in TTI is expected to increase significantly.
Profit side:
Gross profit margin: year-on-year – 7.6pct to 19.3%, single Q4 fell 4.3pct to 23.8%, which was greatly suppressed by exchange rate and raw materials, and Q4 improved significantly month on month, or related to the re judgment of price;
Expense ratio: the annual sales and R & D expense ratio remained stable, with a year-on-year increase of -0.03pct, – 0.1pct to 0.3% and 3.4%, and the management expense ratio increased by 0.6pct to 3.9%;
Net profit margin: – 4.1pct to 10.6% for the whole year, and single q4-3.5pct to 13.2%. From a month on month perspective, Q4 increased by 5.1pct compared with Q3, mainly due to the improvement of gross profit margin.
Business outlook:
1. Profit restoration is being realized: the company has already reflected strong profit restoration in the fourth quarter. Recently, the United States has exempted some small household appliances from tariff. According to the prospectus, the company has reduced the price of vacuum cleaners by 3-5% due to tariff problems, which has brought room for price increase to the company.
2. The second curve is about to take off: in addition to the traditional main business of vacuum cleaner OEM, the company’s two new business developments deserve attention: ① electric tools: according to the annual report, the existing garden electric tools have been recognized by current customers, and it is expected to realize mass production and sales in 2022; ② Automotive motor: the company is one of the few local brands with mass production capacity of EPS brushless motor in China, and has reached cooperation with many EPS system suppliers and vehicle enterprises. It is expected to usher in significant growth in 22 years.
Investment suggestions:
Considering the impact of the Shanghai epidemic on the supply chain of the Yangtze River Delta, we lowered the company’s profit forecast for 20222023 and introduced the profit forecast for 2024. It is expected to achieve sales revenue of 3.31, 3.74 and 4.34 billion yuan (formerly 3.49 and 4.01 billion yuan), with a year-on-year increase of 16%, 13% and 16%, and realized net profit attributable to the parent company of 450, 530 and 640 million yuan (formerly 460 and 560 million yuan), with a year-on-year increase of 49%, 19% and 20%. The growth of the company’s main business is steady, the profit can be repaired, the volume of the second curve is imminent, and the “buy” rating is maintained.
Risk tips:
The development of automobile business was less than expected, overseas consumption fell more than expected, the cost of raw materials rose sharply again, and the risk of customer concentration
