\u3000\u3 Shengda Resources Co.Ltd(000603) 008 Xlinmen Furniture Co.Ltd(603008) )
The performance is in line with market expectations and falls below the upper limit of the notice. The company achieved an operating revenue of 7.772 billion yuan in 2021, a year-on-year increase of + 38.2%; The net profit attributable to the parent company was 559 million yuan, a year-on-year increase of + 78.3%; Deduction of net profit not attributable to parent company was 496 million yuan, a year-on-year increase of + 58.2%. In 2021q4, the operating revenue was 2.729 billion yuan, a year-on-year increase of + 25.7%; The net profit attributable to the parent company was 185 million yuan, a year-on-year increase of + 39.1%; Deduct the net profit not attributable to the parent company of 171 million yuan, a year-on-year increase of + 17.4%.
Independent brands have made rapid progress and continued to expand stores at a high speed. 1) Independent brand retail business: the revenue was 5.174 billion yuan, a year-on-year increase of + 65%, accounting for 66.6%. By channel, the offline revenue was 4.076 billion yuan, a year-on-year increase of + 65%; Online revenue was 1.098 billion yuan, a year-on-year increase of + 63%. By the end of 2021, there were 3899 offline stores of Xlinmen Furniture Co.Ltd(603008) brand (including 1062 Ximian Series); There are 596 MD and xiatu stores, with a net increase of 852 stores compared with the end of 2020. By brand, Xlinmen Furniture Co.Ltd(603008) brand revenue was 4.52 billion yuan, a year-on-year increase of + 73%; The income of MD and xiatu was 650 million yuan, a year-on-year increase of + 23%. 2) Independent brand engineering business: revenue of 470 million yuan, a year-on-year increase of + 9%. 3) Agent processing business: the revenue was 2.128 billion yuan, a year-on-year increase of + 19%. By product, the mattress revenue was 3.961 billion yuan, a year-on-year increase of + 39%; The revenue of soft beds and supporting products was 2.42 billion yuan, a year-on-year increase of + 70%; Sofa revenue was 1.054 billion yuan, a year-on-year increase of + 47%; The revenue of wooden furniture was 218 million yuan, a year-on-year increase of – 28%.
Business structure optimization drives the gross profit margin upward. In terms of profitability, the company’s gross profit margin in 2021 was + 1.49pp to 32% year-on-year (the data in 2020 was adjusted according to the new income standard, the same below); The net profit margin attributable to the parent company increased from + 1.09pp to 7.19% year-on-year. In terms of expense rate during the period, the sales expense rate increased from + 2.66pp to 15.36% year-on-year (mainly due to strengthening brand publicity and marketing); The rate of administrative expenses increased from -0.77pp to 4.04% year-on-year; R & D expense ratio + 0.14pp to 2.36% year on year; The financial expense ratio was -0.61pp to 0.67% year-on-year. In 2021, the cost of raw materials and energy was high. The company resisted the upward pressure of cost through business structure optimization, price increase and raw material inventory management, and the gross profit margin rose against the trend.
Excellent cash flow and operational efficiency. In 2021, the company realized operating cash flow of 704 million yuan, a year-on-year increase of – 4.92%; The ratio of operating cash flow to net income from operating activities was 110.47%. In terms of operating efficiency, the number of inventory turnover days in 2021 was 64.72 days, a year-on-year decrease of 29.49 days; The turnover days of accounts receivable were 45.19 days, a year-on-year decrease of 15.55 days; Continuous optimization of business efficiency.
Profit forecast and investment rating: independent brands grow rapidly, channel expansion accelerates, and maintain the company’s profit forecast from 2022 to 2023. We expect the net profit attributable to the parent company to be RMB 730, 930 and 1.2 billion from 2022 to 2024 (equity incentive target is RMB 715, 925 and 1.207 billion), corresponding to pe14, 11 and 9x. The development momentum of independent brands is strong. Option incentive and employee stock ownership highlight the development confidence of the management and maintain the “buy” rating.
Risk tip: the price of raw materials fluctuates, the industry competition intensifies, and the channel expansion is less than we expected.
