\u3000\u3 Shengda Resources Co.Ltd(000603) 848 Guangdong Hotata Technology Group Co.Ltd(603848) )
Event: the company released its annual report for 2021, and achieved an operating revenue of 1.425 billion yuan during the reporting period, a year-on-year increase of + 22.88%; The net profit attributable to the parent company was 300 million yuan, a year-on-year increase of + 12.97%, and the net profit attributable to the parent company after deducting non profits was 279 million yuan, a year-on-year increase of + 22.4%.
Comments:
Disturbed by factors such as the epidemic situation and the rise in the price of raw materials, Q4’s business performance is under pressure. The implementation of the company’s provincial operation platform model is progressing smoothly, and the annual revenue performance is in line with expectations. In terms of single quarter, the company’s Q4 achieved a revenue of 477 million yuan, a year-on-year increase of + 2.26%, a net profit attributable to the parent of 82 million yuan, a year-on-year increase of – 28.39%, and a net profit attributable to the parent of 95 million yuan after deduction, a year-on-year increase of – 4.97%. Q4’s single quarter business performance is under pressure. We believe that the main reasons are: (1) affected by the epidemic control, orders in some regions of Q4 cannot be delivered normally; (2) The prices of main raw materials of the products continued to run at a high level; (3) Certain impairment and bad debt reserves are accrued for some customers, which will drag down the company’s net profit in the short term.
The gross profit margin was dragged down by the cost of raw materials, driving the company’s net profit margin down. On the one hand, affected by the sharp fluctuations in the prices of electronic components, hardware accessories, plastics and other raw materials, on the other hand, in order to accelerate the penetration of smart home products, the company did not raise the price of products to transmit cost pressure, resulting in the annual gross profit margin of the company from – 3.32pcts to 45.09% year-on-year. During the period, the expense ratio decreased by 2.37pcts to 21.7% year-on-year, including the sales expense ratio decreased by 1.39pcts to 14.26%, the management and R & D expense ratio decreased by 0.58pcpts to 8%, and the financial expense ratio decreased by 0.41pts to -0.56%, driving the annual net interest rate to decline by 1.85pcts to 21.15% year-on-year.
The effect of intelligent product upgrading is prominent, and the growth of online channels is strong. Throughout the year, the revenue of smart home products / clothes hanger products was 1.082311 billion yuan respectively, with a year-on-year increase of + 53.70% / – 23.93% and a year-on-year increase of + 91.96% / – 23.65% to 95.851024900 sets respectively. The intelligent upgrading effect of products was prominent. For e-commerce channel companies, multiple platforms are developed simultaneously, and products are stationed in many high-quality platforms such as Xiaomi mall, Suning pop, pinduoduo flagship store and so on. The annual sales revenue of online e-commerce channels was 678 million yuan, a year-on-year increase of + 38.90%. In the future, with the continuous expansion of the company’s products from intelligent drying to intelligent door locks and other categories, it is optimistic that the company’s market share will continue to expand with the development of the smart home industry.
Investment advice: profitability is under pressure in the short term and the momentum of long-term growth remains unchanged. Considering the current high price of raw materials and the disturbance of the epidemic to the company’s normal production and operation order, we lowered the company’s profit forecast for 20222023. It is estimated that the company’s net profit attributable to the parent company in 20222024 will be RMB 350 / 4.0 / 480 million respectively (the original predicted value of RMB 386 / 441 million in 20222023), corresponding to the current market value PE of 15 / 13 / 11x respectively, maintaining the “buy” rating.
Risk tip: the expansion of new products is less than expected, and the cost of raw materials fluctuates sharply.
