\u3000\u3 Shengda Resources Co.Ltd(000603) 579 Shanghai Rongtai Health Technology Corporation Limited(603579) )
Event: Shanghai Rongtai Health Technology Corporation Limited(603579) published the annual report of 2021. The company achieved revenue of 2.61 billion yuan in 2021, yoy + 29.3%; Achieved performance of 240 million yuan, yoy + 22.5%, achieved deduction of non performance of 130 million yuan, yoy-12.9%. After conversion, Q4 achieved revenue of 750 million yuan in a single quarter, yoy + 21.5%; Achieved performance of 50 million yuan, yoy + 43.1%, and achieved deduction of non performance of - 10 million yuan, yoy-159.2%. We believe that the company's domestic sales channels have been continuously improved, brand marketing has gradually developed, export business has continued to grow, and Q4 business performance meets the expectations of the capital market.
Channel optimization and brand marketing were carried out simultaneously, and Q4 revenue grew steadily: Rongtai Q4 revenue maintained rapid growth, mainly because the company continued to explore online sales channels, continuously optimized channel layout, and effectively responded to the sales impact of the normalization of the epidemic on offline stores. According to the data of business consultant, the sales of Taoxi platform of Q4 Rongtai + momoda double brands are yoy + 65.9%. Domestic sales tiktok: 1) RongTai brand is deeply involved in online master price competition, active layout of vibrant new business operators, deep seeding channels, and with the help of daring live and spokesperson Wang Yibo, sales scale has been increasing against the trend, and Q4 RongTai brand sales platform YoY +38.8%. 2) The brand of momoda has continued to gain insight into consumer demand and reasonably match the product structure of massage chairs and massage small pieces. In 2021, the annual revenue was 200 million yuan, yoy + 106.7%. Q4 momoda brand Amoy platform sales yoy + 570.1%. In terms of export: although facing the challenges of repeated global epidemics and tight shipping, the company has actively expanded export channels and walked hand in hand with customers, realizing the continuous growth of export revenue. In 2021, the company's export revenue was 1.39 billion yuan, yoy + 31.9%, of which the Korean market revenue was yoy + 9.3%, and the overall revenue of the United States, Australia, Canada and Latin America doubled over the same period of last year. The company's overseas sales trend continues to grow, and our company's export revenue continues to grow. Looking forward to the follow-up, we believe that the company will continue to improve the channel structure and strengthen brand marketing, and the revenue is expected to maintain a high growth rate.
Q4's profitability has improved: the net interest rate of Q4 Rongtai is 6.4%, year-on-year + 1.0pct. The price of Q4 raw materials is at a high level, and the cost pressure of the company is still large. The gross sales difference of Q4 Rongtai is -3.0pct year-on-year. However, the overall profitability of Q4 company is still improved, mainly because the company's disposal of its subsidiary, Shanghai, resulted in an investment income of 40 million yuan, and the proportion of Q4 investment income in revenue was + 7.2pct year-on-year.
Q4 net operating cash flow increased: Rongtai Q4 net operating cash flow was + 290 million yuan, yoy + 37.5%, mainly due to the company's enhanced bargaining power over the upstream (the company's balance of accounts payable at the end of the year was yoy + 12.2%), and the cash paid by Q4 for purchasing goods and receiving labor services was yoy-17.1%. At the end of 2021, the balance of monetary capital + trading financial assets of the company was 1.32 billion yuan, yoy + 33.4%, and the company had abundant funds in its accounts.
Investment suggestion: in the long run, Rongtai will actively build domestic sales channels. With the increase of the popularity of massage appliances, the company's domestic sales revenue may increase rapidly; At the same time, the company continues to expand overseas markets, and its export business is expected to maintain growth. We expect that the company's EPS from 2022 to 2024 will be 2.06/2.44/2.81 yuan respectively, maintaining the investment rating of Buy-A, and the six-month target price will be 30.95 yuan, corresponding to 15 times PE in 2022.
Risk tip: the price of raw materials has risen sharply, and overseas trade policy risks
