\u3000\u3 Shengda Resources Co.Ltd(000603) 008 Xlinmen Furniture Co.Ltd(603008) )
Event overview
Xlinmen Furniture Co.Ltd(603008) released the annual report of 2021. In 2021, the company achieved a revenue of 7.772 billion yuan, a year-on-year increase of 38.21%; The net profit attributable to the parent company was 559 million yuan, a year-on-year increase of 78.29%; The net profit after deducting non-profit was 496 million yuan, a year-on-year increase of 58.19%. In terms of cash flow, the net cash flow from operating activities was 704 million yuan, a decrease of 4.92% over the same period last year. Quarterly, the company achieved revenue of RMB 1.25 billion, RMB 1.857 billion, RMB 1.936 billion and RMB 2.729 billion in Q1, Q2, Q3 and Q4 in 2021, with year-on-year growth of 72.51%, 48.4%, 31.06% and 25.74%; The net profit attributable to the parent company was 84 million yuan, 133 million yuan, 156 million yuan and 185 million yuan respectively, with a year-on-year increase of 255.55%, 37.53%, 13.42% and 38.83%.
Analysis and judgment:
Revenue side: soft beds and supporting products are growing rapidly
During the reporting period, the company continued to improve product competitiveness and store image, and increased advertising to enable Wuxi Online Offline Communication Information Technology Co.Ltd(300959) all channel sales. In 2021, the company achieved mattress revenue of 3.961 billion yuan, a year-on-year increase of 38.74%. The revenue of soft beds and supporting products was 2.42 billion yuan, a year-on-year increase of 70.02%. Sofa revenue was 1.054 billion yuan, a year-on-year increase of 46.88%. The revenue of wooden furniture was 218 million yuan, a year-on-year decrease of 28.06%, mainly due to the strategic adjustment of the company’s business in this period. In 2021, the company’s main domestic sales accounted for 83.48% of the total operating revenue, an increase of 35.89% over the previous year; The main business of export sales in this period accounted for 14.99% of the total operating revenue, an increase of 46.41% over the previous year.
Profit side: the net interest rate increased year-on-year
In terms of cost, the company’s overall gross profit margin was 32% in 2021, down 1.76pct year-on-year, mainly due to the company’s adjustment of relevant freight from sales expenses to operating cost accounting in accordance with the requirements of the new revenue standard on the treatment of transportation costs as contract performance costs. The company’s overall net profit margin was 7.79%, up 1.55pct year-on-year. By product, the gross profit margin of the company’s mattress was 36.17%, down 0.57 PCT year-on-year. The gross profit margin of soft beds and supporting products was 30.75%, down 4.72 PCT year-on-year. The gross profit margin of sofa was 21.89%, down 6.25 PCT year-on-year. The gross profit margin of wooden furniture was 14.7%, down 4.27pct year-on-year. In terms of expenses, the company’s period expense rate in 2021 was 22.43%, a year-on-year decrease of 2.01pct. Among them, the rates of sales, management and financial expenses were 15.36%, 4.04% and 0.67% respectively, with a year-on-year decrease of 0.77, 0.77 and 0.61pct. The company’s R & D expense ratio increased by 0.14pct to 2.36% year-on-year, mainly due to the increase in R & D material investment in this period. The company’s investment income was 428431 million yuan, an increase of 872.04% year-on-year, mainly due to the confirmed disposal of shengxihuashi’s equity transfer income in the current period.
Other important financial indicators
At the end of 2021, the company held monetary capital of RMB 1.732 billion, a year-on-year increase of 19.2%. The company’s credit impairment loss was 59.843 million yuan, a year-on-year increase of 54.58%, mainly due to the increase in the impairment of litigation related matters mentioned in the bad debt calculation of Evergrande’s bills in the current period. The notes receivable of the company was 3.593 million yuan, a year-on-year decrease of 96.70%, mainly due to the increase in bill settlement in the current period. The company’s other current assets were 179 million yuan, a year-on-year increase of 53.43%, mainly due to the increase of prepaid advertising and rental expenses in the current period.
Equity incentive shows the company’s confidence in the future
During the reporting period, the company continued to improve the benefit sharing mechanism and launched the 2021 stock option incentive plan and employee stock ownership plan. The incentive objects are the directors, supervisors and core technology (business) backbone of the company. The launch of the new incentive plan will help fully mobilize the employees’ sense of responsibility to the company, attract and retain excellent management talents and core backbone, further enhance the cohesion of employees and stimulate the vitality of the organization. The assessment objective of equity incentive is directly related to the company’s operating income and net profit. It is expected that the company’s performance will enter an explosive period.
Investment advice
We believe that in the future, the company will benefit from the improvement of industry concentration, the introduction of new products of its own brand, new e-commerce models such as live broadcasting and goods delivery, and the creation of industrial ecosystem. Taking into account the exercise requirements of the company’s equity incentive, we raised the company’s profit forecast from 2022 to 2023, raised the forecast of the company’s operating revenue of RMB 8.087/93 billion from 2022 to 2023 to RMB 9.491/11.698 billion, and raised the EPS of 22-23 years The forecast of 59 / 1.92 yuan is 1.85/2.40 yuan. We predict that the company will achieve revenue of 14.386 billion yuan and EPS of 3.12 yuan in 2024, corresponding to the closing price of 27.05 yuan / share on April 19, 2022, and PE of 14.6/11.28/8.68 times respectively, maintaining the “buy” rating of the company.
Risk tips
1) sharp decline in demand; 2) The market promotion of new products is less than expected; 3) Industry competition intensifies.
