\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 11 Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) )
Event: Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) released the annual report of 2021. In 2021, the company achieved an operating revenue of 1.23 billion yuan, an increase of 71.66% year-on-year; The net profit attributable to the parent company was 210 million yuan, a year-on-year increase of 45.76%. 21q4 achieved an operating revenue of 421 million yuan, a year-on-year increase of 77.82%; The net profit attributable to the parent company was 54 million yuan, a year-on-year increase of 12.03%. The company plans to distribute cash dividends of RMB 6.00 (including tax) for every 10 shares, totaling RMB 65 million, with a cash dividend rate of 30.95%.
The company's revenue increased rapidly. The company's revenue in 2021 increased by 71.66% year-on-year. In terms of products, the company's integrated stove revenue was 1.126 billion yuan, a year-on-year increase of 91.59%, much higher than the growth rate of the industry. According to the data of ovicloud, the retail sales of integrated stove in 2021 increased by 41% year-on-year. We believe that the main reason is the rapid growth of the company's online distribution revenue. In terms of sales mode, the company's distribution revenue was 1.101 billion yuan, a year-on-year increase of 80.33%, accounting for 89.58%. The company's direct sales revenue was 122 million yuan, with a year-on-year growth rate of 22.64%, which was lower than the distribution model. During the reporting period, the company's sales amount on jd.com and tmall platform was 696 million yuan, a year-on-year increase of 199%, of which the growth rates of jd.com and tmall were 193% and 212% respectively. From the perspective of per capita purchase frequency and direct sales revenue of e-commerce channels, the company's online distribution business accounted for a relatively high proportion.
Advertising investment increased significantly. In 2021, the gross profit margin of the company's sales was 44.73%, a year-on-year decrease of 0.86pct, of which the gross profit margin of integrated stove products was 46.94%, a year-on-year increase of 1.4pct. We believe that the company's gross profit of integrated stove business increased year-on-year under the background of rising raw material prices, which is mainly due to the better transfer of cost pressure through product structure upgrading. In 2021, the company's sales, management, finance and R & D expenses changed by 99.94% / 34.89% / - 39.69% / 75.51% year-on-year, and the expense rates were 19.25% / 3.44% / - 0.93% / 4.49% respectively, with a year-on-year change of 2.72 / - 0.94/0.22/0.1pct. The increase of the company's sales expense rate is mainly due to the increase of the company's advertising investment. The company spent 88.34 million yuan on advertising in 2021, a year-on-year increase of 100%. In a single quarter, the company's Q4 profit decreased significantly, and the gross profit margin and net profit margin decreased by 4.55 and 7.54 PCT respectively. We believe that the main reason for the decline in gross profit is the rise in the price of raw materials, and the main reason for the decline in net profit is the obvious increase in Q4 R & D and financial expense rate. Overall, the net profit margin of the company in 2021 was 17.04%, a year-on-year decrease of 3.03pct.
Layout Omni channel coverage. The company adopts the "flat" sales channel management mode and vigorously develops e-commerce enabled dealers. By the end of the reporting period, the company had more than 1300 dealers and established exclusive stores in major counties and cities in China, basically realizing the wide coverage of distribution channels. The company also carried out the strategic layout of three-dimensional channels such as "Ka channel + e-commerce channel + home decoration channel + engineering channel + sinking channel". By the end of the reporting period, the company had more than 3500 sinking channel outlets and dealer stores, and more than 5200 cooperative decoration enterprises.
Investment advice. The company actively improves channel development and increases marketing investment, which is expected to enjoy the rapid development dividend of integrated stove industry. We estimate that the net profit attributable to the parent company from 2022 to 2023 will be RMB 281 million and RMB 361 million, and the corresponding EPS will be RMB 2.6 and RMB 3.34, maintaining the "recommended" rating.
Risk tip: the risk of intensified industry competition, the risk of raw material price changes, and the risk that the penetration rate is lower than expected.
