\u3000\u3 Shengda Resources Co.Ltd(000603) 008 Xlinmen Furniture Co.Ltd(603008) )
Key investment points
Event: Xlinmen Furniture Co.Ltd(603008) released the first quarterly report of 2022. The company’s revenue increased by 2022q1.05 billion yuan; The net profit attributable to the parent company was 54 million yuan, with a decrease of 36.18%; The non net profit deducted was 49 million yuan, an increase of 12.85% at the same time. Non recurring profit and loss decreased significantly (40.93 million yuan in the same period last year), mainly due to the high base formed by the sale of Shengxi Huashi (21 Q1 investment income of 23.16 million yuan) and the change in the net investment equity of Ruixi company (17.86 million yuan from the change in fair value), and the profit growth after deducting non recurring profit in 22q1 matched the income.
The growth of OBM business drives the improvement of overall gross profit, increases investment and continues to build brand influence. 1) In terms of profitability, 2022q1 company achieved a gross profit margin of 34.26% (considering the change of freight caliber, under the reduction caliber + 3.00pct.); The net interest rate attributable to the parent company is 3.84% (- 2.92 PCT.); The net profit margin after deduction is 3.49% (-0.03pct.). 2) In terms of period expenses, the sales expense rate is 19.93% (reduction caliber, + 1.75 PCT.); The management fee rate is 6.40% (+ 1.39pct.), It is mainly due to the increase of wages, training and amortization expenses in the current period; The financial expense rate is 1.33% (+ 0.47pct.), It is mainly due to the increase of loan scale and loan interest expenditure in the current period; The R & D expense rate is 2.81% (+ 0.17pct.). 3) In terms of cash flow, the net cash flow from operating activities of 2022q1 company was -551 million yuan (- 162.38%), which was mainly due to the increase of purchase payment and salary payment in the current period.
Business side: the independent brand retail business has made a good start, and the engineering business strategy has been adjusted. 1) The revenue of independent brand retail business in 2022q1 was 918 million yuan (+ 20% YoY). By channel, the revenue of offline channel in 2022q1 was 694 million (+ 16% YoY); Online channel 2022q1 revenue 223 million (+ 31%yoy). The company continues to make efforts in offline and online channels, and its revenue is still growing steadily under the high base in the same period of 2021. It is optimistic about the continuous development of its own brands. 2) The revenue of engineering business in 2022q1 was 39 million yuan (-42%yoy), mainly due to the strategic adjustment of engineering business. 3) The revenue of OEM business in 2022q1 was 448 million yuan (+ 8%yoy), and the OEM business was stable.
Channel side: channel expansion has been steadily promoted, and the share has been increased through all channels. By the end of the first quarter of 2022, the number of terminal stores of the company had totaled 4589, a net increase of 94 over the beginning of the year. By brand, there are 3991 Xlinmen Furniture Co.Ltd(603008) exclusive stores (+ 92), including 1085 Ximian distribution stores (+ 23); 598 M & D and xiatu stores (+ 2).
Category side: mattresses continue to be sold in large quantities and actively expand categories. 1) The revenue of mattress business in 2022q1 was 746 million yuan (+ 21% YoY), accounting for 53.1%. 2) The revenue of sofa business in 2022q1 was 193 million yuan (- 2% YoY). 3) The revenue of soft beds and their supporting products in 2022q1 was 427 million yuan (+ 16% YoY), accounting for 30.4%. 2022q1 independent brand retail business grew steadily. Looking forward to the whole year, the company will focus on “eight high quality” and take “business, organization and process” reform as the main line to improve business operation quality, and is optimistic about the long-term development of independent brand retail business.
Investment suggestion: the company focuses on the main furniture industry, builds its own brand and omni-channel sales network, and is expected to grow steadily. We expect that the company’s sales revenue from 2022 to 2024 will be RMB 9.67, 11.99 and 14.76 billion, with a year-on-year increase of 24.4%, 24.0% and 23.1%, and the net profit attributable to the parent company will be RMB 730, 950 and 1.23 billion, with a year-on-year increase of 31.2%, 29.7% and 29.5%, and EPS will be RMB 189, 245 and 318, maintaining the “buy” rating.
Risk tips: the risk of decline in the prosperity of real estate, the risk of higher than expected cost investment, and the risk of intensified industry competition
