\u3000\u3 China Vanke Co.Ltd(000002) 677 Zhejiang Meida Industrial Co.Ltd(002677) )
Key investment points
Performance summary: the company released the first quarterly report of 2022. Q1 company achieved a revenue of 410 million yuan, a year-on-year increase of 12.1%; The net profit attributable to the parent company was 120 million yuan, a year-on-year increase of 20.9%. Among them, the company received a tax refund of 17.44 million yuan. Excluding the impact of tax rebate, the net profit attributable to the parent company was 100 million yuan, a year-on-year increase of 3.6%.
The industry maintained a high outlook, and the company’s revenue continued to grow. In the first quarter of 2022, the penetration rate of integrated stove continued to increase, and the integrated stove industry still maintained a high prosperity. According to the total data pushed by ovicloud, the retail volume of integrated stove industry in 2022q1 reached 510000 units, with a year-on-year increase of 4.9%; Retail sales amounted to 4.75 billion yuan, a year-on-year increase of 19.5%. As one of the high-quality enterprises of integrated stoves, the company has been deeply engaged in the industry for many years, with perfect product and channel layout. It has fully benefited from the industry dividend. The sales volume of integrated stoves has maintained rapid growth, boosting the steady growth of Q1 revenue of the company.
The gross profit margin was damaged in the short term, and the cost control and fee reduction + tax rebate increased the net profit margin. During the reporting period, affected by the rise in the price of raw materials, the company’s comprehensive gross profit margin was 49.8%, a year-on-year decrease of 1.3pp. In terms of expense rate, the company actively reduced costs and controlled expenses, fully smoothed the risk of rising raw material prices, and promoted the sales expense rate to decrease by 1.3pp to 11.1%; The management fee rate was 8%, basically unchanged year-on-year; The financial expense ratio was – 1.2%, a year-on-year decrease of 0.3pp. With the efforts of the company, the net interest rate of the company remained relatively stable, and the net interest rate of Q1 increased by 2.1pp to 29.4% year-on-year. In addition, the company received a vat refund of RMB 17.44 million for embedded software products, which also had a positive impact on the realization of the company’s net interest rate.
The growth space of the industry is large, and the company’s long-term operation is good. Compared with traditional lampblack machines, the penetration rate of simultaneous interpreting industry is still low, and the market growth is huge. The company has been deeply engaged in the integrated stove industry for many years and has certain first mover advantages in brand and channel construction. By the end of 2021, it has more than 1900 first-class dealers and more than 3800 marketing terminals in China. While maintaining the advantages of offline channels, the company has continuously enhanced the competitiveness of e-commerce channels and increased its online market share. According to AVC data, 2022q1’s online sales share was 6.5%, up 3.6pp year-on-year. With the further improvement of the company’s channel layout, it is expected that the company’s long-term operation will be better.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 1.14/1.29/1.45 yuan respectively. Considering that the company is one of the high-quality enterprises of integrated stoves, the product channel layout will be further improved and the “buy” rating will be maintained.
Risk warning: the price of raw materials may fluctuate sharply and the market competition intensifies.
