\u3000\u3 Shengda Resources Co.Ltd(000603) 908 Comefly Outdoor Co.Ltd(603908) )
Event: the company released the annual report of 2021, and the annual operating revenue was 923 million yuan, a year-on-year increase of + 43.64%; The net profit attributable to the parent company was 78.61 million yuan, a year-on-year increase of + 70.99%; The net profit deducted from non parent company was 61.63 million yuan, a year-on-year increase of + 96.2%. It is proposed to distribute a cash dividend of 0.9 yuan per share.
Comments:
The growth rate of all channels is bright, and the private brand business is expected to expand its share. In terms of business, the company’s export (ODM / OEM) business / brand operation business achieved revenue of 615 million yuan and 306 million yuan respectively, with a year-on-year increase of + 28% / + 90% respectively, and the sales proportion was 67% / 33% (75% / 25% in 2020). The company’s overseas customers are mainly concentrated in Europe, Oceania and Asia. Affected by the epidemic, the camping market demand in developed countries is growing steadily; Camping in China continues the upsurge since 2020, with broad growth space. From the perspective of private brand channels, online / professional equipment distribution and group purchase / direct sales / franchise channels achieved revenue of RMB 109 / 111 / 0.28/58 million respectively, with a year-on-year increase of 127% / 192% / 22% / 12% respectively. Online through visual optimization and category expansion of camping equipment to achieve a breakthrough in hot sales from single to multiple; The large animal husbandry business department (professional equipment distribution and group purchase) has expanded new channels, and the number of customers has increased rapidly; The small animal husbandry business department (direct marketing + franchise) optimized and adjusted its channels, and its business grew steadily.
Good fee control & the decrease of tax rate promotes the improvement of profitability. In the whole year, the gross profit margin of the company was – 0.66pct to 24.8%, of which the gross profit margin of export / domestic sales was – 2.5 / + 1pcts to 20.4% / 33.9% respectively. The decline of gross profit margin of export business was mainly due to the rise of raw material & Shipping price and exchange rate fluctuation. The ratio of sales / management / R & D / financial expenses decreased by 0.4/0.9/0.6/0.5pct to 5.8% / 8.8% / 2.8% / 0.9% respectively year-on-year, mainly due to the faster growth of revenue than expenses. The company passed the audit of high-tech enterprises, and the income tax rate was – 5.7pcts to 15.8%. Under the comprehensive impact, the net interest rate was + 1.4pcts to 8.5% year-on-year.
Industry prosperity improvement & the company’s product strength is upgraded, and its performance is expected to maintain rapid growth in 2022. Focusing on exquisite camping, the company develops a multi scene product matrix, increases cross-border cooperation and creates a lifestyle brand. Under the bonus of improving the bearing of exposed market scenes in China, the performance is expected to maintain rapid growth. The company issued the financial budget report for 2022. The financial budget indicators plan to achieve the main business income of 1.28 billion yuan, with a year-on-year plan of + 38.64%; The net profit was 120 million yuan, with a planned year-on-year increase of + 52.64%.
Investment suggestion: under the influence of the epidemic, the scene of the global camping market has improved. The company has the first mover advantage in the field of exquisite camping in China. It is covered for the first time and is rated “buy”. The company actively expands the camping equipment product matrix and optimizes and adjusts the channel structure. Under the growth dividend of the industry, the market share is expected to continue to increase. We estimate that the company’s net profit attributable to the parent company in 22/23/24 years is RMB 120/1.6/210 million, corresponding to 27/20/15 times of the current market value PE respectively. It is first covered and given a “buy” rating.
Risk tip: industry competition intensifies, overseas demand slows down, and the prices of raw materials and shipping rise.
