\u3000\u3 Shengda Resources Co.Ltd(000603) 008 Xlinmen Furniture Co.Ltd(603008) )
Recently, the company released its annual report for 2021. In 2021, the company’s revenue, net profit attributable to the parent and net profit deducted from non attributable to the parent increased by 38.21% / 78.29% / 58.19% respectively year-on-year. The main reasons why the company’s annual performance growth exceeded expectations: the volume and price of main products at the product end increased at the same time; The sinking of the channel side, the acceleration of the market, the improvement of the effectiveness of single stores, and the rapid growth of online business.
Product side: the production and sales of mattresses and sofas increased significantly, and the unit price increased, raising the revenue growth of soft beds
During the reporting period, the revenue of the company’s main products mattresses, soft beds and supporting products and sofas increased by 38.74%, 70.02% and 46.88% respectively year-on-year; Due to the strategic adjustment of the company’s business, the revenue of wooden furniture decreased by 28.06% year-on-year. Due to the adjustment of relevant freight costs from sales expenses to operating cost accounting, the gross profit margin has declined. The gross profit margin of mattresses, soft beds and supporting products, sofas and wooden furniture decreased by 0.57pct/4.72pct/6.52pct/4.27pct to 36.17% / 30.75% / 21.89% / 14.7% respectively.
In terms of output, the total output of mattresses, beds and sofas in 2021 increased by 29.27% / 22.03% / 31.93% respectively, of which the self-produced part replaced some purchased finished products, and the self-produced growth rate of mattresses, beds and sofas was 30.27% / 26.81% / 24.39% respectively. In terms of sales volume, the total sales volume of mattresses, beds and sofas in 2021 increased by 27% / 19.93% / 26.66% respectively.
In terms of unit price and single piece cost, the average unit price of mattress in 2021 was 896 yuan, and the single piece cost was 572 yuan, an increase of 9.24% / 10.23% respectively over the same period last year; In 2021, the average unit price of soft beds and supporting products was 2480 yuan, and the single piece cost was 1718 yuan, an increase of 41.76% / 52.13% respectively over the same period last year; In 2021, the average unit price of sofa was 4501 yuan, and the single piece cost was 3516 yuan, an increase of 15.97% / 26.52% respectively over the same period last year. Channel end: actively expand stores offline, and the online growth rate is obvious
As of December 31, 2021, the company has 3899 Xlinmen Furniture Co.Ltd(603008) exclusive stores (including 1062 Ximian series and 2837 other series), 596 M & D exclusive stores (including xiatu), an increase of 759 / 93 compared with 2020, with a year-on-year increase of + 24.17% / 18.49% respectively. Compared with 2020, the growth rate of new stores is faster and the store efficiency is improved. Among them, Ximian series focuses on the sinking market, with a store opening growth rate of 32.75%. The company will continue to sink channels in 2022, establish a distribution system, help dealers expand channel advantages and promote continuous growth of performance.
The company’s online business continued to rank first in the sales of main platform categories, realized innovative services such as sending new and taking old ones, free trial sleep and so on, and greatly improved the timeliness of delivery. During the reporting period, the company’s online business revenue was 1.098 billion yuan, a year-on-year increase of 63.26%. With the younger consumer groups, there is still room for online growth. The stripping of film and television business increased the investment income by 872.04%, and the provision for bad debts of Evergrande bills increased the company’s credit impairment loss by 54.58% year-on-year.
During the reporting period, due to the adjustment of relevant freight from sales expenses to operating cost accounting, the gross profit margin of the company decreased by 0.57pct to 36.17% year-on-year, the expense rate during the period was 22.43%, decreased by 2.01pct year-on-year, and the net profit margin increased by 1.55pct to 7.79%. At the same time, the company has abundant cash flow. By the end of 2021, the monetary capital of the company was 1.732 billion yuan, a year-on-year increase of 19.19%.
The company’s investment income increased by 872.04% year-on-year to 428431 million yuan, mainly due to the confirmation of the disposal of shengxihuashi’s equity transfer income in the current period. 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 company’s credit impairment loss was 59.843 million yuan, a year-on-year increase of 54.58%. Other current assets of the company were 179 million yuan, with a year-on-year increase of 53.43%, mainly due to the increase of prepaid advertising and rental expenses in the current period.
The unlocking conditions of equity incentive highlight the confidence of the company in future performance growth.
During the reporting period, the company launched stock option incentive plan and employee stock ownership plan. The incentive objects are directors, supervisors, senior managers, core managers and core technology (business) backbones of the company. The unlocking conditions of this incentive are: Based on 2020, the growth rate of operating revenue in 22-24 years shall not be less than 66%, 108% and 160%, or the growth rate of net profit shall not be less than 128%, 195% and 285%, binding the core employees of the company, and highlighting the company’s confidence in future performance growth with high standards.
Move forward from single brand to multi brand, deepen old channels and layout new business forms.
The company will move forward from a single brand to a multi brand. The main brand is positioned at the high and low ends. It will make breakthroughs at the high and low ends, blossom at multiple points, and gradually establish an intelligent production based on lean and intelligent manufacturing, so as to build a benchmark production line.
The company will increase the proportion of stores opened by Ximian and Keshan, continue to lay out new business channels for updating needs, and establish a live broadcasting team to help franchisees establish a live broadcasting system and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) make concerted efforts.
Investment suggestion: we estimate that the operating revenue of the company from 2022 to 2024 will be 3.333 billion yuan, 4.056 billion yuan and 4.899 billion yuan respectively, and the net profit attributable to the parent company will be 873 million yuan, 1.108 billion yuan and 1.385 billion yuan, corresponding to PE of 15.45x, 12.18x and 9.74x. Give a “buy” rating.
Risk tip: the risk of raw material price fluctuation, international trade friction and intensified market competition.
