\u3000\u3 Shengda Resources Co.Ltd(000603) 610 Keeson Technology Corporation Limited(603610) )
Performance summary: the company released its annual report for 2021. In 2021, the company achieved a revenue of 2.97 billion yuan, a year-on-year increase of 31.3%; The net profit attributable to the parent company was 360 million yuan, a year-on-year increase of 30.6%; The net profit deducted from non parent company was 320 million yuan, with a year-on-year increase of 36%; Among them, Q4 achieved an operating revenue of 790 million yuan in a single quarter, a year-on-year increase of 14.6%; The net profit attributable to the parent company was 110 million yuan, a year-on-year increase of 27.1%; The net profit of non parent company deduction was 74.06 million yuan, a year-on-year increase of 14.3%. The revenue grew rapidly and the profitability remained stable throughout the year.
Q4 gross profit margin improved and profitability remained stable throughout the year. In 2021, the company’s annual comprehensive gross profit margin was 35.5% (- 2.5pp), which was mainly due to the rising cost of raw materials, the global shortage of containers, the high freight cost, and the increase in depreciation after the 4 million smart electric beds project (phase I) was put into operation during the reporting period. After the unified price increase for customers in July 2021, the gross profit margin of the company has improved significantly, and the gross profit margin of single Q4 has reached 38.3% (+ 3.1pp). In 2021, the gross profit margin of the company’s intelligent electric bed was 36.3% (- 2.7pp), the gross profit margin of mattresses was 36.6% (- 4.5pp), and the gross profit margin of accessories and other products was 21.2% (- 5.1pp). In terms of expense rate, the overall rate of the company in 2021 is 22.5% (- 2.6pp), of which the sales / management / R & D / financial expense rate is 9.1% (- 0.5pp) / 7.4% (- 0.6pp) / 4.8% (- 0.4pp) / 1.2% (- 1pp). Overall, the company’s net interest rate in 2021 was 12%, basically unchanged year-on-year. In addition, at the end of 2021, the company’s inventory was 790 million yuan, a year-on-year increase of 70.9%; Accounts receivable amounted to 480 million yuan (+ 14.6%), mainly due to the slowdown of shipment due to the shortage of shipping. In 2021, the net operating cash of the company was 150 million yuan (+ 180.7%), and the cash flow improved year-on-year.
The overseas demand of electric bed is released, the penetration rate is steadily improved, and the Chinese market potential is expected. In 2021, the company’s revenue from electric smart beds / mattresses / accessories was 2.62 billion yuan (+ 33.7%) / 120 million yuan (+ 4%) / 130 million yuan (+ 18%). By region, the company’s overseas / domestic revenue in 2021 was 2.75 billion yuan (+ 32.5%) / 130 million yuan (+ 9.3%). According to ISPA data, the sales penetration rate of smart electric beds in the United States in 2021 was about 13.9% (+ 0.4pp). With the popularization of intelligent furniture and the transformation and upgrading of consumption habits, the market space of smart electric beds is sufficient. In 2021, benefiting from the extended stay at home after the epidemic and the booming real estate sales in the United States, the demand for furniture in the United States surged, and the revenue of the company’s main major customer TSI (tepur Silian) increased by 34.1% year-on-year in fiscal year 2021. In 2021, the company renewed the three-year electric bed product manufacturing and supply agreement with tepur international. From 2019 to 2021, the company’s sales to the largest customer TSI accounted for 41.8%, 47.2% and 49.7% respectively. In the short term, the company has a solid cooperative relationship with major customers. In addition, the company reached a global strategic cooperation agreement with Garmin in 2021. Garmin is a leading global supplier of smart watches, fitness tracking and digital health solutions. The establishment of cooperation with Garmin represents the company’s further expansion into the field of data application. In the Chinese market, electric beds and smart beds are in their infancy in China. At present, the company mainly strengthens product cognition and market education through hotels, real estate, health care, e-commerce and other channels. It is expected that with the increase of market participants and the improvement of channels, the Chinese market has full growth space. In terms of sub channels, the company focuses on bulk channel sales, and e-commerce channels grow rapidly. In 2021, the company’s bulk / online channel revenue was 2.36 billion yuan (+ 27.9%) and 440 million yuan (+ 50.1%) respectively.
The production capacity expanded steadily and the automation level was further improved. In September 2020, the intelligent factory invested by the company has been officially put into operation. At present, the production capacity of electric bedsteads in China has reached 2 million sets, the automation level has been greatly improved, and the production efficiency is at the leading level in the industry. At the same time, in order to enhance the company’s response to international trade risks, avoid international trade barriers, shorten the supply cycle, timely respond to customers’ needs and further expand overseas new markets, the company has also established factories with a planned capacity of 500000 sets / year in Vietnam and Mexico. The Vietnamese plant was successfully put into operation at the end of 2019, and the Mexican plant has been successfully put into operation in 2021 since it was started in 2020. In 2021, the company planned the phase II 4 million smart electric bed headquarters project, the research center and production supporting plant project, which will be successfully started in 2022. It is expected that the annual production capacity of 1 million sets of sensors and the data center service capacity of 24000 electric beds will be formed after the project is completed.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 1.55 yuan, 1.87 yuan and 2.18 yuan respectively, and the corresponding PE will be 11, 9 and 8 times respectively. Considering that the orders of the company’s downstream major customers are stable and the capacity reserve is sufficient, it is given a valuation of 15 times in 2022, corresponding to the target price of 23.25 yuan, and a “buy” rating is given for the first time.
Risk tips: the risk of sharp fluctuations in raw material prices, the risk of sharp fluctuations in exchange rates, the risk of intensified international trade frictions, the risk of less than expected production progress of new capacity projects, and the risk of intensified industrial competition.
