\u3000\u3 Shengda Resources Co.Ltd(000603) 816 Jason Furniture (Hangzhou) Co.Ltd(603816) )
Key investment points
The performance in 2021 is in line with the market expectation, and the revenue end in 2022q1 is slightly lower than the supermarket expectation. In 2021, the operating revenue was 18.342 billion yuan, a year-on-year increase of + 44.8%; The net profit attributable to the parent company was 1.664 billion yuan, which was + 25.2% year-on-year after excluding the impairment of goodwill in 2020. In 2022q1, the operating revenue was 4.54 billion yuan, a year-on-year increase of + 20.1%; The net profit attributable to the parent company was 443 million yuan, a year-on-year increase of + 15%; Deduct the net profit not attributable to the parent company of 382 million yuan, a year-on-year increase of + 20.3%. 2022q1 company still achieved steady growth under the pressure of the epidemic, and the growth rate of revenue side was slightly higher than that expected by supermarkets.
The growth rate of high-end sofa is beautiful, the growth momentum of domestic mattress is strong, and customization is gradually increasing. In terms of products in 2021, 1) sofa revenue was 9.27 billion yuan, a year-on-year increase of + 44.5%, of which high-end brands Natuzzi and La-Z-Boy, fashion brand tianxipai and sofa export grew rapidly; 2) The revenue of bed products was 3.34 billion yuan, a year-on-year increase of + 42.8%, and the growth momentum of domestic mattresses was strong; 3) The revenue of integrated products was 3.14 billion yuan, a year-on-year increase of + 41.1%; 4) Customization revenue was 660 million yuan, a year-on-year increase of + 44.8%. In terms of subregions, the domestic revenue was 10.71 billion yuan, a year-on-year increase of + 40.1%; Overseas revenue was 6.92 billion yuan, a year-on-year increase of + 48.7%. At the end of 2021, the number of physical stores of the company was 6456, with a year-on-year decrease of 235. The main reason is that the company continued to implement the store series integration, and many single stores were transformed into large stores and comprehensive stores. The number of stores under the series caliber maintained a rapid growth.
In the environment of rising costs, the profitability is relatively stable. In terms of gross profit margin, the gross profit margin in 2021 was 28.87%, with a year-on-year increase of -1.1pp (restore the comparable caliber adjusted by accounting standards, the same below); Among them, the gross profit margin of domestic sales was 34.5%, with a year-on-year increase of -1.21pp; The gross profit margin of export sales was 18.14%, with a year-on-year increase of + 0.97pp. 2022q1 gross profit margin 29.85%, year-on-year + 0.65pp. Sea freight increased in 2021, and the collection of sea freight increased revenue and cost, dragging down the level of gross profit margin. Excluding this impact, the company’s gross profit margin fell by about 0.7pp in 2021, and the price increase and product structure optimization effectively resisted the rise of raw material prices.
In 2021, the cash flow and operating efficiency were stable, and the 2022q1 dealer support plan had a short-term impact on cash flow and receivable days. In terms of cash flow, the operating cash flow in 2021 was 2.041 billion yuan, a year-on-year increase of – 6.41%; The ratio of operating cash flow to net income from operating activities is 117.57%; In 2022q1, the operating cash flow was – 530 million yuan, which was mainly affected by the decline of contract liabilities and the relaxation of dealers’ collection time limit under the epidemic. In terms of operating efficiency, the number of inventory turnover days in 2021 was 59.49 days, a year-on-year decrease of 9.33 days; The turnover days of accounts receivable were 27.53 days, a year-on-year decrease of 2.6 days; Accounts payable turnover days: 47.99 days; A year-on-year decrease of 12.74 days. The number of inventory turnover days in 2022q1 was 64.61 days, an increase of 1.46 days year-on-year; The turnover days of accounts receivable were 33.75 days, with a year-on-year increase of 8.08 days.
Profit forecast and investment rating: the strategic path of the company’s domestic sales of large homes is becoming clearer, and the export share continues to increase. Considering the rise of raw material prices and slightly reducing the profit forecast for 20222023, we expect the company’s net profit for 20222024 to be 2.01, 2.45 and 2.97 billion yuan respectively (the original profit forecast for 20222023 is 2.08 and 2.52 billion yuan), corresponding to pe18, 15 and 12x. As a leader in the soft furniture industry, the company has made solid progress in the retail home strategy, opened the growth ceiling and maintained the “buy” rating.
Risk tip: industry competition intensifies, raw material prices rise, exchange rate fluctuations, freight increases, etc.
