\u3000\u3 Guocheng Mining Co.Ltd(000688) 696 Chengdu Xgimi Technology Co.Ltd(688696) )
Event: in 2021, the company achieved an operating revenue of 4.038 billion yuan, a year-on-year increase of + 42.78%, and a net profit attributable to the parent company of 483 million yuan, a year-on-year increase of + 79.87%.
Q4 performance increased month on month, and overseas market expansion accelerated
Q4 company achieved an operating revenue of 1.394 billion yuan, a year-on-year increase of + 44.97%, and a net profit attributable to the parent company of 183 million yuan, a year-on-year increase of + 88.48%, which was higher than the growth rate of Q3 revenue (+ 32.43%) and performance (+ 44.76%).
In terms of products, in 2021, the operating revenue of the company’s complete projector products / accessories products / Internet value-added services was RMB 3.785159/64 billion respectively, with a year-on-year increase of + 42.75 / + 43.36 / + 55.15%. 21h2 projection machine and accessories / Internet value-added services were + 38.70 / + 51.65% year-on-year respectively. As the absolute leader of projection equipment in China, the company accounted for 21.2% of market shipments in 2021. 3.1pct higher than that in 20 years. In terms of the breakdown of the whole machine products, the sales of the company’s intelligent micro investment / innovative products / laser TV were + 33.79 / – 10.42 / – 17.39% year-on-year respectively. The laser TV took offline Direct stores as the main sales channel, so the sales fell due to the impact of the epidemic.
In terms of regions, benefiting from channel expansion and overseas new product launch, the company launched overseas micro investment new products horizon, horizonpro and elfin and laser TV new product aura in the second half of the year. The overseas revenue of Jimi increased rapidly in 2021. In 2021, the company’s overseas revenue was 3.574434 billion yuan respectively, a year-on-year increase of + 36.07 / + 145.22%, and the domestic and foreign revenue of H2 was + 30.95 / + 149.27% respectively.
In terms of sales mode, the company has deeply cultivated online platforms such as jd.com and tmall.com, and its Wuxi Online Offline Communication Information Technology Co.Ltd(300959) revenue in 21 years has increased by + 51.44 / + 23.99% year-on-year respectively
Adhere to high-end, push up the product structure, increase the proportion of self-developed optical machines and improve the profitability
In 2021, the company achieved a gross profit margin of 35.88%, a year-on-year increase of + 5.63pct, and Q4 achieved a gross profit margin of 33.44%. Considering the base adjustment caused by changes in accounting standards, Q4’s gross profit margin was + 1.79pct year-on-year.
We believe that there are three main reasons for the improvement of the company’s profitability:
1) the company insists on pushing up the product structure. In the past 21 years, the price of the company’s new rspro exceeded the price band of LED projection of more than 8000 yuan for the first time. The company’s high-end line h3s Jingdong flagship store has sold more than 57000 units in the past 21 years. Both of the two high-end products have been listed in the top 10 of the total sales of domestic projection in China. At the same time, the company has reduced discount promotion;
2) with the expansion of sales scale, the bargaining power of the company’s industrial chain has also been improved;
3) in addition, the company now has the automatic assembly capability of some fixed focus lenses and optical machine parts, which can effectively improve the production yield and efficiency, and form the advantage of supply cost. The company’s self-developed optical machine has realized the full introduction of the company’s medium and high-end products, and the comprehensive improvement of various factors has relieved the pressure of the shortage and price increase of core parts.
In terms of products, in 2021, the gross profit margins of projection machine products / accessories products / Internet value-added services were + 5.73 / + 6.55 / + 4.73 PCT year-on-year respectively. The gross profit margins of intelligent projection / innovative products / laser TV products were 35.5/20.79/24.67% year-on-year respectively, and the gross profit margins were + 6.11 / – 0.27 / – 5.99 PCT year-on-year respectively.
In terms of regions, the gross profit margins of Chinese and foreign businesses in 2021 were 35.47/40.39% respectively, with a year-on-year increase of + 5.9 / + 1.23pct respectively.
From the perspective of expense ratio, the company’s sales / management / R & D / financial expense ratio in 21 years was + 1.52 / + 0.20 / + 1.59 / – 0.17pct year-on-year respectively, and the expense ratio of Q4 company was -1.81 / – 0.16 / + 0.94 / – 0.33pct year-on-year respectively. If the impact of accounting standard change is excluded, the sales expense ratio of Q4 is -0.43pct year-on-year. The substantial increase of the company’s sales expenses in 21 years is due to the company’s strengthening of product and brand promotion, and the amount of platform services increases with the expansion of sales scale. In 21 years, the company’s operation and promotion expenses and platform service fees were + 90.11 / + 82.80% year-on-year respectively. In terms of R & D expenses, the company increased R & D investment in new products and technologies, and the number of R & D personnel increased by + 47.79% year-on-year.
Although the cost investment has increased, the adjustment of product structure and the introduction of self polishing machine still create more profit space for the company. In 2021, the company achieved a net profit margin of 11.97%, a year-on-year increase of + 2.47pct, and Q4 achieved a net profit margin of 13.15%, a year-on-year increase of + 3.04pct.
Net cash from operating activities increased significantly:
1) at the end of the period, the company’s monetary capital + trading financial assets + other current assets totaled 2.727 billion yuan, a year-on-year increase of + 244.79%, mainly due to the expansion of the company’s sales scale, the increase in collection and the raising of funds; Notes and accounts receivable totaled 87 million yuan, a year-on-year increase of + 26.49%; In order to meet the market demand and cope with the shortage of supply of some materials, the company increased the preparation of goods. The total inventory at the end of 21 years was 965 million yuan, with a year-on-year increase of 34.54%, of which the inventory of raw materials was + 50.92%.
2) from the perspective of turnover, the turnover days of the company’s inventory / accounts receivable / accounts payable were + 8.13 / – 7.55 / + 43.25 days year-on-year respectively. The increase of the turnover days of the company’s accounts payable was mainly due to the increase of the company’s material procurement and preparation volume and the increase of the company’s project funds of Yibin Industrial Park.
3) in 2021, the net cash flow from the company’s operating activities was 324 million yuan, a year-on-year increase of + 74.73%, and the net operating cash of Q4 was 469 million yuan, a year-on-year increase of 389.80%.
Profit forecast and investment rating: we believe that Jimi, as the leader of China’s intelligent projection, continues to promote and consolidate its market share through medium and high-end products, and promote the promotion of overseas channels. With the strengthening of consumer education, the overseas market is expected to contribute to another growth bright spot of the company in the future. At the same time, the company continues to increase its investment in research and development of self-developed optical machines, and there is still great room to improve the profitability of the company in the future. We are optimistic about the long-term development potential of the company.
We estimate that the company’s operating revenue in 22-24 years will be 5.738/89.86/13.537 billion yuan, with a year-on-year increase of + 42.1 / + 56.6 / + 50.6%. It is estimated that the net profit attributable to the parent company in 22-24 years will be 6.89/10.82/1.654 billion yuan respectively, with a year-on-year change of + 42.6/57.0/52.8%, corresponding to pe26.8% 18 / 16.68/10.91x, maintaining the “buy” rating.
Risk factors: insufficient supply of core components, less than expected launch of new products, less than expected expansion of overseas market channels, intensified market competition, rising prices of raw materials, etc
