\u3000\u3 China Vanke Co.Ltd(000002) 832 Biem.L.Fdlkk Garment Co.Ltd(002832) )
Key investment points
The company released the annual report of 2021 & the first quarterly report of 2022: the revenue in 2021 was 2.72 billion yuan / yoy + 18.09%, the net profit attributable to the parent was 625 million yuan / yoy + 25.20%, and the revenue / net profit attributable to the parent in 2022q1 increased by 30.16% / 41.29% year-on-year to 810 / 213 million yuan respectively. The growth rate of profit side is better than that of revenue side. In 2021, it mainly benefited from the increase of gross profit margin brought by the improvement of product price increase ratio and discount rate, and in 2022q1, it mainly benefited from the decrease of expense rate. Quarter by quarter, the revenue of 2021q1-q4 increased by 48.5% / 23.7% / 11.7% / 3.0% year-on-year respectively, and the net profit attributable to the parent increased by 55.1% / 47.7% / 14.0% / 10.2% year-on-year respectively, showing a year-on-year slowdown quarter by quarter, mainly due to the low base before and high base after the gradual recovery of the company’s operation with the weakening impact of the epidemic in 2020.
Rapid online growth and endogenous extension jointly promote offline growth. 1) By channel, the direct / franchise / online revenue in 2021 was + 17.52% / 18.58% / 24.76% year-on-year, accounting for 70.37% / 25.12% / 4.51% of the total revenue respectively. The online channel base is low. In 2021, based on the advantages of offline channels, the company diverted offline members to online through marketing assistant, super shopping guide and other systems, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) unified price system, and promoted the rapid growth of online revenue. In 2021, the number of VIP members exceeded 700000. 2) From the perspective of endogenous extension offline, by the end of 2021, the number of direct / franchise stores was 532 / 568 respectively, with a net increase of 46 / 75 respectively, corresponding to a year-on-year increase of + 9.47% / 15.21%, that is, the growth of direct / franchise revenue was driven by the expansion of stores and the growth of the same store. The improvement of store efficiency was mainly due to the company’s continuous efforts in brand promotion while adhering to high-quality products, such as ① launching IP co branded clothes of the Forbidden City to comply with the trend of national tide, ② For the 2021 Tokyo Olympic Games, the Chinese national golfers will build the second generation of five-star robes. ③ they will continue to expose and enhance the brand influence together with brand spokesmen Yang Shuo, popular stars Huang Xuan, Duan Yihong and LAN Yingying. ④ they will log in to China Central Television as a “big country brand”, and the brand credibility and authority will be further improved. ⑤ they will sign up with Yongda media to improve the brand exposure through the national high-speed railway screen.
Profitability and operational efficiency have improved. 1) Gross profit margin: due to the improvement of product price increase rate and discount rate, the gross profit margin in 2021 increased from + 2.81 PCT to 76.69% year-on-year, of which the gross profit margin of online / direct / franchise was + 13.34/2.85/1.21 PCT year-on-year respectively. In 2022q1, the gross profit margin increased from -1.07pct to 75.49% year-on-year. 2) Expense ratio: in 2021, the expense ratio increased from + 0.46pct to 47.89% year on year, of which the expense ratio of sales / management / R & D / finance was -0.17 / – 0.01 / + 0.25 / + 0.38pct year on year respectively. In 2022q1, the expense rate increased from -3.37pct to 42.72% year-on-year, of which the expense rates of sales / management / R & D / finance were -2.24 / – 0.52 / + 0.34 / – 0.94pct year-on-year respectively. 3) Net interest rate: as the increase of gross profit is higher than that of expenses, the net interest rate in 2021 is + 1.3pct to 22.96% year-on-year, and the net interest rate in 2022q1 is + 2.06pct to 26.24% year-on-year. 4) Inventory: the inventory at the end of 2021 is 660 million yuan / yoy + 8.65%, and the inventory at the end of 2022q1 is 664 million yuan / yoy + 15.34%. The turnover days of clothing inventory in 2021 / 2022q1 are – 13 / – 64 days to 360 / 298 days respectively year-on-year, and the turnover is optimized; In 2021, the inventory within one year accounted for 58.8%, with a year-on-year increase of + 11.7pct. The inventory structure was improved, and the provision for inventory falling price was cautious. 5) Cash flow: the net cash flow from operating activities in 2021 / 2022q1 increased by + 40.93% / 27.38% year-on-year to RMB 898 / 467 million respectively, and the cash on the company’s account was abundant. As of the end of 2021 / 2022q1, the monetary capital and financial management were RMB 1.7/2 billion respectively.
Profit forecast and investment rating: the company is a leader in high-end sports and fashion clothing. The “Maotai in clothes” card position is accurate. The performance has achieved rapid growth from 2021 to 2022q1, reflecting excellent product strength and brand strength, and the performance has both growth and robustness. Combined with the impact of the epidemic on terminal consumption and logistics transportation since 2022 / 03, we adjusted the net profit attributable to the parent company in 202223 from 29.8% / 21.6% to 28.7% / 24.8% year-on-year, increasing the forecast of 2024 by 21.7%, and the EPS in 202224 were 1.41/1.76/2.14 yuan / share respectively, corresponding to pe16x / 13X / 10x, maintaining the “buy” rating.
Risk tip: the epidemic situation in some areas leads to continued closure and control, weak economy, etc.
