\u3000\u3 China Vanke Co.Ltd(000002) 959 Bear Electric Appliance Co.Ltd(002959) )
Event: the company announced in its annual report for 2021 that it realized an operating revenue of 3.606 billion yuan in 2021, a year-on-year decrease of 1.46%; The net profit attributable to the parent company was 283 million yuan, a year-on-year decrease of 33.81%. Among them, the operating revenue in the fourth quarter was 1.242 billion yuan, a year-on-year increase of 6.83%; The net profit attributable to the parent company was 944229 million yuan, a year-on-year decrease of 11.13%.
The impact of the high base is weakening, and the expansion of superimposed categories has achieved remarkable results, and the revenue growth rate has become positive in the fourth quarter of a single year. In 2021, the company’s kitchen, living and other small household appliances businesses achieved revenue of RMB 2.933 billion, 407 million and 228 million respectively, with year-on-year growth rates of – 6%, 1% and 96% respectively. Among them, the income of pot, pot and other rigid products in small kitchen appliances increased steadily, with annual income increasing by 13% and 12% respectively year-on-year; Relying on new products such as air fryer, the western style category has a rapid and large volume, with a year-on-year increase of 2% in revenue in 2021; Due to the pressure of high base number, the annual revenue of electric and electric products decreased by 31% and 19% respectively year-on-year. Under the guidance of product diversification strategy, the company’s newly expanded category revenue performed well. Other small household appliances businesses mainly engaged in personal care and new mother and baby products achieved a year-on-year increase of 96% in revenue in 2021, and the proportion of total revenue increased 3PCT to 6% year-on-year. In a single quarter, with the weakening of the impact of high performance base and the growth of new category revenue, the revenue growth of 2021q4 company became positive, realizing a year-on-year increase of 7%.
The gross profit margin increased steadily, and the investment in marketing and R & D continued to increase. The gross profit margin of the company was 32.78% in 2021, with a year-on-year increase of 0.4pct. The company actively promoted cost reduction and efficiency increase, and effectively alleviated the impact of high raw material prices on the gross profit margin. On the expense side, the company’s sales expense ratio reached 15.34% in 2021, with a year-on-year increase of 3PCT, mainly due to the year-on-year increase of 49% in marketing expenses and the continuous strengthening of marketing investment. In 2021, the company realized the net interest rate attributable to the parent company of 7.86%, a year-on-year decrease of 4pct. In 2021q4, the gross profit margin of the company increased by 5pct year-on-year and the net profit attributable to the parent company decreased by 2pct year-on-year, of which the sales and R & D expense rates increased by 6.8pct and 0.2pct year-on-year respectively. In order to consolidate the brand advantage and technological innovation strength, the company’s marketing and R & D investment continued to increase.
Category expansion, grasp the advantage of long tail, and make steady progress in multi-channel layout. Grasp the advantages of category side R & D and continuous growth of emerging companies through category side R & D and category development mechanism, and realize the continuous growth of categories through category side R & D; On the channel side, the company has steadily promoted the construction of offline channels. In 2021, the revenue of offline channels reached 357 million yuan (year-on-year + 8%), accounting for 10% of the overall revenue; Tiktok relies on the experience of Kwai Chung traditional e-commerce channels to enhance the proportion of proprietary business, and achieve new products and crowd breaking through the new channels such as jitter and fast hand. The layout of multiple channels is steadily advancing, and brand influence is expected to continue to improve.
Combined with the prosperity of downstream demand and the investment of the company’s expenses, it is predicted that the net profit attributable to the parent company from 2022 to 2024 will be RMB 356 / 438 / 513 million respectively (previously predicted to be RMB 404 / 505 million from 2022 to 2023). Give the company a valuation of 22 times P / E ratio in 2022 (maintain a premium rate of 20%), corresponding to the target price of 50.13 yuan, and maintain the “overweight” rating.
Risk tips
The risk that the insufficient R & D and innovation capability leads to the failure of category expansion progress to meet expectations and the decline of valuation; Risks of intensified industry competition; Risk of sharp rise in raw material costs
