\u3000\u3 Shengda Resources Co.Ltd(000603) 008 Xlinmen Furniture Co.Ltd(603008) )
Key investment points
Performance summary: the company released] the annual report of 2021, which realized a revenue of 7.77 billion yuan (+ 38.2%) in 2021. After excluding the film and television business revenue in the same period, the revenue of the main furniture industry increased by about 45%; The net profit attributable to the parent company was 560 million yuan (+ 78.3%), an increase of 71% year-on-year after excluding film and television business; The net profit deducted from non parent company was 500 million yuan (+ 58.2%), with a year-on-year increase of 51% after excluding film and television business. Among them, single Q4 company achieved an operating revenue of 2.73 billion yuan (+ 25.7%); The net profit attributable to the parent company was 180 million yuan (+ 38.8%), and the annual revenue performance of the company maintained a high growth in 2021.
Cost reduction and fee control have achieved remarkable results and improved profitability. In 2021, the company’s overall gross profit margin was 32% (- 1.8pp), which was mainly due to the adjustment of relevant freight costs from sales expenses to operating cost accounting in the new revenue standard. After restoration, the gross profit margin increased by 1.5pp year-on-year, mainly due to the rapid rise of raw material prices, and the company raised prices twice during the year, effectively hedging the rise of costs. In terms of products, the gross profit margin of mattresses is 36.2% (- 0.6pp), that of soft beds and supporting products is 30.8% (- 4.7pp), that of sofas is 21.9% (- 6.5pp), and that of wooden furniture is 14.7% (- 4.3pp). In terms of expense rate, the overall rate of the company in 2021 is 22.4% (- 2PP). The company’s sales expense ratio was 15.4% (- 0.7pp), with a year-on-year increase of 2.7pp after reducing the transportation fee, mainly due to the company’s increased investment in brand promotion to expand its brand influence; The management fee rate is 4% (- 0.8pp); The R & D expense ratio was 2.4% (+ 0.1pp). The company continued to increase R & D investment, and the R & D expense increased by 47% year-on-year; Financial expense is 0.6pp-0.7%. In addition, the investment income in 2021 was 42.843 million yuan (former value – 5.55 million), which was mainly due to the recognition of the income from the disposal of shengxihuashi’s equity transfer; The provision for credit impairment loss was – 59.843 million yuan (previous value – 38.71 million yuan), which was mainly due to the increase in the impairment of litigation related matters mentioned in the bad debt provision of Evergrande bills in the current period. Overall, the company’s net profit margin was 7.2%, with a year-on-year increase of 1.6pp and improved profitability. In terms of cash flow, the net operating cash flow of the company in 2021 was 700 million yuan (- 4.9%), and the cash flow was relatively healthy.
Soft beds and sofas grew brightly, and the volume and price of mattress products rose simultaneously. By product, the company’s mattress revenue in 2021 was 3.96 billion yuan, a year-on-year increase of 38.7%. Split the volume and price. In 2021, the average price of the company’s mattress products was 896 yuan / set (+ 9.2%), and the sales volume was 4.42 million sets (+ 27%). The mattress products showed a trend of simultaneous increase in volume and price, and the product structure continued to be optimized. The revenue of soft beds and supporting products was 2.42 billion yuan, a year-on-year increase of 70%; Sofa revenue was 1.05 billion yuan, with a year-on-year increase of 46.9%. Soft beds and sofas, as new products gradually cultivated by the company, continued to improve the associated sales rate, and the annual revenue growth was bright. In 2021, the proportion of mattress / soft bed / sofa revenue to total revenue reached 51% / 31.1% / 13.6% respectively. Soft beds and sofas gradually contributed to important revenue growth. It is expected that the company’s sofa and soft bed categories will still have large growth space with the enhancement of category synergy.
While rapidly expanding stores, the growth vitality of single stores remains unchanged, and the 1 + N channel structure is gradually improved. By brand, in 2021, the company’s own brand retail business revenue reached 5.17 billion yuan, a year-on-year increase of 65%, of which the offline / online revenue was 4.08/1.1 billion yuan, a year-on-year increase of 65% / 63%, and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) both achieved high growth. In terms of offline channels, by the end of 2021, the total number of physical stores of the company had reached 4495, a net increase of 852 compared with the end of 21. Among them, the number of stores of Xlinmen Furniture Co.Ltd(603008) other series (including Jingmian, fasiman, Keshan, etc.) / Ximian series / M & D (including xiatu) reached 2837 / 1062 / 596 respectively, with a net opening of 497 / 262 / 93 compared with the beginning of the year, and the number of stores maintained a rapid growth rhythm. Among them, Ximian series has broken through thousands of stores, and the channel continues to sink with Xlinmen Furniture Co.Ltd(603008) brand endorsement + high cost performance. From the perspective of single store revenue, the average store revenue of the company in 2021 was about 1.27 million yuan, with a year-on-year increase of 27%. While the offline channels expanded rapidly, the stores maintained good growth vitality. It is expected that in 2022, the company will still maintain a fast pace of expanding stores and further improve its market share. In terms of online channels, Xlinmen Furniture Co.Ltd(603008) brand has formed in-depth cooperation with tmall, jd.com, Suning.Com Co.Ltd(002024) and other core e-commerce platforms; At the same time, new channels such as supermarkets, home appliances and home decoration are laid out in advance to simplify the transaction scenario, explore new increments, and gradually build a “1 + n” Omni channel sales network with offline specialty stores and online platforms as the core and supplemented by distribution stores and supermarkets’ home appliance stores. In addition, the business income of independent brand engineering was 470 million yuan, a year-on-year increase of 9%; The income from processing business was 2.13 billion yuan, a year-on-year increase of 19%, maintaining a steady growth.
Profit forecast and investment suggestions. It is estimated that the EPS from 2022 to 2024 will be 1.86 yuan, 2.38 yuan and 3.00 yuan respectively, and the corresponding PE will be 15, 11 and 9 times respectively. Maintain the “buy” rating.
Risk tip: the risk of sharp fluctuations in raw material prices, the risk that the store expansion progress is less than expected, and the risk of intensified industry competition.
