\u3000\u3 China Vanke Co.Ltd(000002) 293 Luolai Lifestyle Technology Co.Ltd(002293) )
Event overview
In 2021, the company’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were 5.760713/679 billion yuan respectively, with a year-on-year increase of 17.30% / 21.92% / 22.13%, which was in line with expectations and met the conditions of equity incentive. 21q4’s revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were RMB 1.761/2.22/216 billion respectively, with a year-on-year increase of 6.47% / – 28.70% / 2.86%. The growth rate slowed down month on month (21q3’s revenue growth rate was 9%), and the government subsidy decreased from 18 million to 6 million. 22q1 company’s income / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 1.286/1.59/143 billion respectively, with a year-on-year decrease of 2.49% / 12.81% / 17.67%, lower than expected. The company distributed a cash dividend of 0.6 yuan per share, with a dividend rate of 71% and a dividend rate of 4.5%.
Analysis and judgment:
Online slowdown, store opening mainly comes from franchising, and the efficiency of direct and franchised stores has increased by 9%. In 2021, the online / offline revenue was RMB 1.612 billion / 4.148 billion respectively, accounting for 28% / 72% respectively, the revenue increased by 13.5% / 18.8% year-on-year, and the online growth rate slowed down (the online / offline growth rate in 2020 was 26% / – 7%). In online channels, the company realized gmv9 on tmall platform throughout the year 900 million yuan, an increase of 22.5% over the same period, of which eleven of the total sales of home textile industry reached the first line, 483 million yuan, and the tiktok business grew rapidly. Among offline channels, the revenue from direct sales / franchising / other / American channels was RMB 371 / 20.29 / 647 / 1102 million respectively, with a year-on-year increase of 11% / 23% / 8% / 22%, accounting for 6% / 35% / 11% / 19% respectively. In terms of the number of split stores and effective stores, (1) the increase in the number of stores mainly comes from the opening of franchise stores. As of the end of 21, the number of head offices of the company was 2481 (261 / 2220 direct / franchise stores respectively), with a year-on-year net opening of 245 (4 / 241 direct / franchise stores respectively). (2) It is estimated that the efficiency of Direct stores / the shipment of single franchise stores are 142 / 910000 yuan respectively, with a year-on-year increase of 9% / 9%. (3) The area of franchise stores is larger than that of Direct stores, and the area of Direct stores has increased by 4%. At the end of 21, the area of direct / franchise stores was 134 / 169 square meters respectively, with a year-on-year increase of 4% / 0%. It is estimated that the average efficiency of direct sales is 10600 yuan, with a year-on-year increase of 5%.
In terms of sub brands, infield revenue grew strongly, the main brand was stable, and Lexington’s net profit margin increased significantly. In 2021, the revenue of main brand / infield / Lexington was RMB 4.459/1.99/1.102 billion respectively, with a year-on-year increase of 16% / 35% / 22%, and the net interest rate was 13.4% / 6.7% / 9.4% respectively, with a year-on-year increase of 0.2 / – 1.2/2.2pct.
Benefiting from the price increase, the gross profit margin of 21q4 increased significantly. In 2021, the gross profit margin was 45%, with a year-on-year increase of 1.82pct, 21q4 gross profit margin was 49.07%, with a year-on-year increase of 7.92pct, 22q1 gross profit margin was 41.85%, with a year-on-year decrease of 0.6pct. In terms of products, the gross profit margin of quilt core increased significantly. The gross profit margin of standard kit / quilt core / furniture was 48.71% / 48.86% / 37.18% respectively, with a year-on-year increase of 0.36/4.37/2.12pct. In terms of channels, the gross profit margin of all channels has increased. The gross profit margin of online channels / direct channels / franchise channels / other channels / the United States was 48.5% / 66.4% / 45.3% / 36.4% / 37.2% respectively, with a year-on-year increase of 2.02/2.53/1.94/0.63/2.19pct.
In 2021, the net interest rate attributable to the parent company / net interest rate deducted from non attributable to the parent company were 12.38% / 11.78% respectively, with a year-on-year increase of 0.47pct, mainly due to the increase of gross profit margin. In terms of expenses, the ratio of sales / management / Finance / R & D expenses in 2021 was 19.1% / 6.5% / – 1.2% / 2.1% respectively, with a year-on-year increase of 0.52/0.38/0.56/0.1pct. The increase of sales expenses was mainly due to the increase of promotion expenses, advertising expenses, conference expenses and the depreciation expenses of use rights caused by the new leasing standards. The increase of conference expenses was mainly due to the adjustment of the order form of the company affected by the epidemic in 2020. The increase of management expense rate mainly comes from the increase of wages and the increase of depreciation of right of use assets under the new lease standards. The increase of financial expense rate is mainly due to the decrease of interest income. 21q4’s net profit margin was 12.8%, a year-on-year decrease of 0.8pct, mainly due to the significant increase in sales and management expenses and the decrease in other income. 22q1’s net profit margin was 12.4%, down 1.46pct year-on-year, mainly due to the decline of gross profit margin and the increase of sales expense rate.
The amount of inventory increased year-on-year, and the business cycle in 21 years improved by 18 days. In 2021, the amount of accounts receivable / inventory / accounts payable was 475 / 13.13 / 553 million yuan respectively, with a year-on-year increase of – 9.46% / 14.92% / – 2.28%, a month on month decrease of 13.26% / 1.10% / 2.23% compared with 21q3, and the turnover days of accounts receivable / inventory / accounts payable were 31 / 140 / 64 days respectively, with a year-on-year decrease of 7 / 12 / 1 days. At the end of 22q1, the amount of accounts receivable / inventory / accounts payable was RMB 489 / 13.15 / 415 million respectively, with a year-on-year increase of 1% / 13% / – 5%, 3% / 0% / – 24% compared with the end of 21. The turnover days of accounts receivable / inventory / accounts payable were 34 / 158 / 58 days respectively, with a year-on-year increase of – 1 / 21 / – 1 day.
Investment advice
Our analysis: 1) the company is expected to continue to expand new stores in 22 years. 2) E-commerce is expected to maintain steady growth, and live broadcasting is expected to contribute to higher growth. 3) According to the announcement, the company appointed Mr. LV Jiale to take charge of the supply chain related business (previously served as the chief supply chain officer of Haier Smart Home Co.Ltd(600690) China). We analyzed that with the further optimization of the supply chain, the gross profit margin is expected to remain stable and rise in the future. Considering the impact of the epidemic, the income of 22 / 23 was reduced from 6.585/7.434 billion yuan to 6.358/7.291 billion yuan, the new 24-year income was 8.322 billion yuan, the net profit attributable to the mother in 22 / 23 was reduced from 826 / 945 million yuan to 787 / 921 million yuan, the new 24-year net profit attributable to the mother was 1.052 billion yuan, the EPS in 22 / 23 was reduced from 0.98/1.13 yuan to 0.94/1.1 yuan, and the EPS in 24 years was 1.25 yuan. The closing price on April 20, 2022 was 13.26 yuan, and the corresponding 22 / 23 / 24pe was 14 / 12 / 11x, maintaining the “buy” rating.
Risk tips
The uncertainty of epidemic development; Online growth slowed down; Lexington’s losses increased; Systemic risk.
