\u3000\u3 China Vanke Co.Ltd(000002) 293 Luolai Lifestyle Technology Co.Ltd(002293) )
Revenue / performance in 2021 increased by 17% / 22% year-on-year, in line with expectations. The company released its annual report for 2021. The annual revenue increased by 17.3% year-on-year to RMB 5.76 billion, the gross profit margin increased by + 1.1pct to 45%, the sales / management expense ratio increased by - 0.8 / - 0.1pct to 19.6% / 6.9%, the net profit attributable to the parent increased by + 1.2pct to 12.4%, the net profit attributable to the parent increased by 21.9% year-on-year to RMB 710 million, the single Q4 revenue increased by 6.5% year-on-year to RMB 1.76 billion, and the net profit attributable to the parent remained unchanged at RMB 220 million. The overall performance was in line with expectations.
Affected by the epidemic, the revenue / performance of 2022q1 decreased by 2.5% / 12.8% year-on-year. The company released the 2022q1 quarterly report on the same day. Affected by the epidemic, the revenue decreased by 2.5% to 1.29 billion yuan year-on-year, the gross profit margin decreased by - 0.6pct to 41.8%, the sales / management expense ratio increased by + 2.0 / + 0.3pct to 17.9% / 7.2%, the net profit attributable to the parent decreased by - 1.5pct to 12.4% year-on-year, and the net profit attributable to the parent decreased by 12.8% to 160 million yuan year-on-year.
The operation ability of Direct stores has been strengthened, the franchise has been restored, and the profitability of online channels has been enhanced. 1) Direct channels: in 2021, the revenue of direct channels increased by 11% to 370 million yuan year-on-year, and the gross profit margin increased by + 2.53pct to 66.43% year-on-year. During the year, the company strengthened the construction of direct channels, optimized the member management system, and achieved excellent terminal sales performance. In 2021, the sales of direct channels in the same store increased by 14.3% year-on-year. 2) Franchise channels: in 2021, the revenue of franchise channels increased by 23% year-on-year to RMB 2.029 billion, and the gross profit margin increased by + 1.94 PCT to 45.31% year-on-year. After the epidemic, the trend of increasing the concentration of the home textile industry appeared. Through the expansion of franchisees and gate stores, the company went deep into the market to consolidate the brand share. By the end of the year, the company had 2481 stores (compared with the beginning of the year + 245), including 2220 franchise stores (compared with the beginning of the year + 241).
3) the tiktok channel: the company expands the channel of jitter, and develops the live business and community marketing to enhance the brand influence. The product's main brand Luo Lai and the sub LOVO online have different price raise to strengthen and clarify the brand tonality. In 2021, the channel of business channel revenue increased 14% to 1 billion 612 million yuan, gross profit margin was +2pct to 48.45%, and profitability increased gradually.
Overseas furniture business recovered rapidly. In 2021, the revenue in the United States increased by 22% year-on-year to RMB 1.1 billion, and the gross profit margin increased by + 2.19 PCT to 37.19% year-on-year. Lexington, as the leading furniture brand in the United States, recovered rapidly after the epidemic. In the long run, we expect the revenue of furniture business in the United States to continue to grow.
The operation is healthy, the cash flow is good, and the supply chain capacity is gradually strengthened. In 2021, the company's inventory turnover days / accounts receivable turnover days decreased by 13 / 7 days to 140 / 31 days year-on-year, and the operation was healthy. Affected by the high base brought by social security relief last year, the operating cash flow decreased by 14% year-on-year to 730 million yuan. In 2022q1, the operating cash flow increased by 34% year-on-year to 20 million yuan. The cash flow is in good condition. According to our tracking, at present, the construction of Nantong factory is progressing steadily. In the long run, it is expected to drive the company to improve its production capacity and strengthen its R & D and design capacity.
In 2022, we expect the company's revenue / performance to increase by 10%. In the short term, the fluctuation of the epidemic has affected offline sales, especially in East China, the company's main region. Throughout the year, we believe that the company will further strengthen channel expansion on the basis of 2021. Considering that the second half of the year is often the peak season for the company's sales and store opening, therefore, with the easing of the epidemic, the company's annual revenue / performance is expected to achieve steady growth.
Profit forecast and investment suggestions: the leaders of the home textile industry adhere to the reform, and with the improvement of brand influence and channel efficiency, the revenue and performance grow steadily. We adjusted the forecast of the company's net profit attributable to the parent company from 2022 to 2024 to 7.9/9.2/1.04 billion yuan respectively, with a growth rate of 10.7% / 16.7% / 12.3% and a current price of 13.41 yuan, corresponding to 14 times of PE in 22 years, maintaining the "buy" rating.
Risk warning: global epidemic recurrence risk; Price fluctuation risk of raw materials; RMB exchange rate fluctuation risk
