\u3000\u3 Shengda Resources Co.Ltd(000603) 816 Jason Furniture (Hangzhou) Co.Ltd(603816) )
Event 1: the company issued the 2021 annual report. In 2021, the company achieved a revenue of 18.342 billion yuan, an increase of 44.81%, a net profit attributable to the parent company of 1.664 billion yuan, an increase of 96.87%, and a deduction of non net profit of 1.427 billion yuan, an increase of 141.55%. In a single quarter, 21q4 achieved a revenue of 5.117 billion yuan, an increase of 24.16%; The net profit attributable to the parent company was 427 million yuan, an increase of 359.61% and the deduction of non net profit was 314 million yuan, an increase of 231.01%. Excluding the impact of goodwill impairment in the same period last year, the annual net profit attributable to the parent company increased by 25% and 33% in Q4.
Event 2: the company released the first quarterly report of 2022. In 22q1, the company achieved a revenue of 4.540 billion yuan, an increase of 20.05% and a net profit attributable to the parent company of 443 million yuan, an increase of 15.11%, slightly lower than the revenue growth rate, mainly due to the recognition of domestic sales revenue with higher profitability due to the disturbance of the epidemic in the short term.
Profit side: it is expected to enter the profit recovery channel in 2022. In 2021, the company’s gross profit margin on sales was 28.87% (- 1.1pct.), The net interest rate attributable to the parent company is 9.07% (+ 2.39pct.). Among them, the gross profit margin of domestic trade is 34.5% (- 1.21pct.), Mainly due to the impact of changes in accounting standards; Foreign trade gross profit margin 18.24% (+ 0.97pct.), Foreign trade profits are expected to repair. The core influencing factors of gross profit margin in 2021 are: 1) changes in accounting standards, and transportation expenses are included in costs from sales expenses. 2) Ocean freight collection and payment business lowers the apparent gross profit margin. Expense side: the rates of sales, management, R & D and financial expenses in 2021 were 14.74%, 1.79%, 1.65% and 0.39% respectively, with a year-on-year increase of -4.95pct- 0.56pct.、+ 0.02pct.、- 0.65pct.。 Looking forward to 2022, considering the scale effect driven by the volume of new categories and the continuous promotion of new products, the gross profit margin of domestic and foreign sales in Q1 has been gradually repaired.
The contribution of expanding categories of foreign trade is incremental, and we are optimistic about the steady growth of domestic sales driven by categories and channels. As of 2021, the company’s export sales were 6.918 billion yuan (+ 48.68%) and domestic sales were 10.712 billion yuan (+ 40.05%), of which the domestic sales in Q4 is expected to increase by 20% in a single quarter, achieving steady growth under a high base, and the growth rate of foreign trade is higher than that of domestic sales. Looking forward to 2022, foreign trade business, mattresses and other categories will contribute new increment, and Q1 growth will increase month on month; Domestic orders were received steadily, and the growth rate of domestic sales in Q1 decreased month on month, mainly due to the blocked shipment of some orders in March under the influence of the epidemic, which is expected to be delayed to Q2 for confirmation.
The whole house integration trend is beginning to show, focusing on the large-scale channel store and the logical deduction of the platform. By the end of the year, there were 541 “big + 6000” stores in the “channel + medium” mode, and nearly 2021 “big + 6000 stores in the” channel + medium “mode. Category side: the company adheres to the development path of single product – space – whole house – lifestyle. In terms of mattresses, functional sofas and other categories, the company empowers products by building a product platform and gradually increases the quantity. In 2021, the company’s sofa product revenue was 9.267 billion (+ 44.51%), and the domestic sales of functional sofas are expected to double; The revenue of bed products is 3.338 billion yuan (+ 42.75%), and the growth rate of domestic sales is expected to be higher than that of the whole; The revenue of customized furniture was 660 million yuan (+ 44.80%), and that of integrated products was 3.140 billion yuan (+ 41.13%). Looking forward to 2022, under the strategy of accelerating the opening of front-end stores and large stores, it is expected that high potential categories are still expected to continue to increase, boosting the company’s retail transformation. Since the launch of the second phase of dealer holding and intensive development plan in March, it has also demonstrated the confidence of dealers.
Investment suggestion: the company implements the big home strategy of multi category and omni channel, continues to broaden the moat of brands, channels and products, and the software leader is expected to continue to grow steadily. We expect that the company’s sales revenue from 2022 to 2024 will be 22.29 billion yuan, 26.85 billion yuan and 32.22 billion yuan, with year-on-year growth of 21.5%, 20.5% and 20.0% respectively, and the net profit attributable to the parent company will be 2.08 billion yuan, 2.52 billion yuan and 3.05 billion yuan (adjusted according to the annual report, the previous forecast value from 2022 to 2023 will be 2.13 billion yuan and 2.6 billion yuan), with year-on-year growth of 25.2%, 21.1% and 20.8% respectively, corresponding to EPS of 3.30, 3.99 and 4.82 yuan, maintaining the “buy” rating.
Risk tip: the risk of decline in the prosperity of real estate, the risk of upward rise in the cost of raw materials, and the risk of decline in the average profit margin of the industry caused by intensified competition.
