\u3000\u3 China Vanke Co.Ltd(000002) 003 Zhejiang Weixing Industrial Development Co.Ltd(002003) )
Core view
The zipper business grew rapidly, driving the annual revenue to increase by 34.4%. In 2021, the company's revenue was 3.36 billion, a year-on-year increase of 34.4%; The net profit attributable to the parent company after deduction was 430 million, an increase of 87.2%, mainly driven by the rapid growth of zipper business and the steady growth of button business. The change of accounting standards reduced the gross profit margin and sales expense rate by 2.3 percentage points, the gross profit margin was 38.0%, the comparable caliber increased by about 1.5 percentage points, and the gross profit margin of all products increased; The company's intelligent cost reduction and efficiency increase achieved results. When the cost rate of equity incentive increased by 0.5 percentage points, the four cost rates decreased by 1.2 percentage points.
In the second half of the year, the growth momentum was strong, and the gross profit margin was affected by the rise of production costs. In the second half of 2021 alone, the company's revenue was 2.87 billion, a year-on-year increase of 36.9%; The net profit attributable to the parent company after non deduction was 210 million, with a year-on-year increase of 57.6%. The acceleration of growth was mainly driven by the strong growth of zipper business and overseas customer orders; In the second half of the year, affected by the rise of production costs, the gross profit margin was 36.7%, a decrease of 0.8 percentage points. In the fourth quarter alone, the company's revenue was 980 million, a year-on-year increase of 44.8%; The net profit attributable to the parent company after deduction of non-profit was 50 million, with a year-on-year increase of 40.2%, with a strong growth momentum; The gross profit margin is 31.9%, which is mainly affected by the changes in accounting standards and the consolidation of new subsidiaries. It is expected to decrease by about 1 percentage point under comparable standards.
It meets the needs of downstream fast reaction and fashion design, and the zipper button double faucet "the strong is always strong". From the perspective of downstream demand, the garment industry has a strong demand for fast reaction and fashion design, which requires the upstream auxiliary material enterprises to improve their scale, design and fast reaction, and the concentration of the auxiliary material industry is further improved. From the perspective of production and management, on the one hand, the company promotes intelligent efficiency improvement and enhances competitiveness, on the other hand, it steadily promotes the construction of industrial parks at home and abroad. Medium and long-term capacity improvement and efficiency release will promote the steady growth of the company. In terms of products, the company established Linhai Xingrui to strengthen product design barriers, developed 584 new products during the year, pioneered anhydrous dyeing technology, and continued to consolidate product and technical advantages.
Risk warning: weak downstream demand; The epidemic has repeatedly affected the supply of raw materials and product exports.
Investment suggestion: affected by the epidemic in the short term, it has the potential to increase its share in the medium and long term, and maintain the "buy" rating
After years of accumulation, the company has many core advantages such as scale, cost, technology and rapid response. In recent years, the intelligent and international strategy has driven the company to resume rapid growth. In the future, the company is expected to further increase its customer share and benchmark international leaders, with broad growth space. As the repeated epidemic in China in March may affect the demand of downstream garment enterprises and the commencement of overseas garment factories, which will put some pressure on the company's order receiving situation, we slightly reduced the profit forecast. It is estimated that the company's net profit from 2022 to 2024 will be 510 / 6 / 710 million yuan respectively (originally 530 / 630 million yuan), with a year-on-year increase of 14.6% / 16.9% / 17.9%, EPS of 0.64/0.75/0.99 yuan respectively, and the current share price corresponding to PE is 18.5x/15.9x/13.4x respectively, Due to the reduction of profit forecast, the reasonable valuation was lowered to 15.4-16.2 yuan (pe20-21x in 2023, formerly 16.2-16.9 yuan), maintaining the "buy" rating.
