\u3000\u3 China Vanke Co.Ltd(000002) 508 Hangzhou Robam Appliances Co.Ltd(002508) )
Key investment points
Performance summary: 1) in 2021, the company achieved a revenue of 10.15 billion yuan, a year-on-year increase of 24.8%; The net profit attributable to the parent company was 1.33 billion yuan, a year-on-year decrease of 19.8%. In a single quarter, Q4 company achieved a revenue of 3.08 billion yuan, a year-on-year increase of 23%; The net profit attributable to the parent company was – 10 million yuan, a year-on-year decrease of 102%. The decline in the company’s profits was mainly due to the company’s provision for bad debts of 780 million yuan based on the principle of prudence. 2) In 2022q1, the company achieved a revenue of 2.09 billion yuan, a year-on-year increase of 9.3%; The net profit attributable to the parent company was 370 million yuan, a year-on-year increase of 2.5%.
The concentration of traditional categories has been further improved, and the leading competitive advantage is obvious. During the reporting period, the traditional kitchen electricity market industry accelerated clearing, and the market share concentrated to leading enterprises. As an industry leader, the company has further expanded its market share through two rounds of products and channels. According to AVC data, the market share of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) sales of the company increased by 1.5/2.7pp year-on-year respectively, of which the offline market share of range hood, gas stove and disinfection cabinet was 30.5% / 29.3% respectively, with a year-on-year increase of 2.3/3.5pp; The market share of online kitchen electric package retail sales reached 30.4%, with a year-on-year increase of 2.4pp, ranking first in the industry.
The second and third product groups have excellent performance, and the integrated stove is expected to be large-scale. During the reporting period, the second and third product groups of the company performed well, accounting for 9.2%/13.4% of revenue respectively, with a year-on-year increase of 0.7/2.8pp respectively. Among them, the integrated steaming and baking machine, embedded dishwasher and water heater performed well, and the revenue of dishwasher and water heater more than doubled. According to AVC data, the company’s offline retail sales share of embedded steaming and baking machine reached 34.8%, with a year-on-year increase of 2.9pp, ranking first in the industry; The market share of the company’s offline retail sales of dishwashers reached 17.5%, with a year-on-year increase of 8pp, ranking second in the industry for the first time. In addition, the company released new integrated stove products at the end of March 2022. We expect that the sales volume of the second and third product groups represented by dishwashers, integrated stoves and integrated steaming and baking machines is expected to promote the rapid growth of the company’s performance.
Equity incentive shows development confidence. The company launched the equity incentive plan in April 2022, and plans to grant 4.81 million stock options to 285 middle managers and core technical backbones at the price of 29.27 yuan / share, accounting for 0.51% of the total share capital of the company. The assessment conditions are subject to the revenue of 2021, and the CAGR of the revenue of 2022 / 2023 / 2024 is not less than 15%. According to the company’s revenue of 10.15 billion yuan in 2021, the revenue of 22-24 years corresponding to the unlocking conditions is 11.67/134.2/15.44 billion yuan respectively. The company’s equity incentive raised its revenue target, demonstrating the company’s confidence in long-term development.
Profitability is under short-term pressure. During the reporting period, affected by the price rise of raw materials, the company’s comprehensive gross profit margin was 52.4%, a year-on-year decrease of 3.8pp, and the gross profit margin was under pressure in the short term. In terms of expense ratio, the company’s sales / management / financial expense ratio is 24.2% / 7.2% – 1.4% respectively, with a year-on-year change of – 2.2 / – 0.2 / + 0.5pp respectively. Overall, under the influence of the rise in the price of raw materials and the large provision for bad debts, the company’s net interest rate was 13.3%, down 7.5pp year-on-year.
The performance of traditional kitchen appliances was sluggish, and the growth rate of Q1 slowed down. According to the AVC push total data, the scale of the traditional kitchen electricity market in 2022q1 was 9.62 billion yuan, a year-on-year decrease of 7%. In the case of sluggish performance of traditional kitchen appliances, Q1 company still maintained a steady growth. The revenue of Q1 company increased by 9.3% year-on-year, and the net profit attributable to the parent company increased by 2.5% year-on-year. In terms of profitability, affected by the rise in the price of raw materials, the company’s comprehensive gross profit margin was 52.6%, down 4.8pp year-on-year. The company’s sales / management / financial expense ratio was 29% / 7.2% / – 1.5% respectively, with a year-on-year change of – 3.2 / + 0.5 / – 0.1pp respectively. Overall, the company reduced the cost control fee to hedge the cost pressure, and the net interest rate was 17.5%, a year-on-year decrease of 1.5pp.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 2.34/2.73/3.17 yuan respectively. Considering that the company is a leading enterprise of kitchen electricity, the layout of diversified categories is improved, the terminal share is further improved, and the “buy” rating is maintained.
Risk warning: the price of raw materials may fluctuate sharply and the terminal sales may be less than expected.
