\u3000\u3 Shengda Resources Co.Ltd(000603) 816 Jason Furniture (Hangzhou) Co.Ltd(603816) )
On April 21, the company released the annual report of 2021 and the first quarterly report of 2022. The revenue in 2021 was 18.34 billion yuan, an increase of 44.8% and that in 2022q1 was 4.54 billion yuan, an increase of 20.1%, maintaining a high-speed growth trend. The company relies on high-quality software products to expand the whole house customization, which is expected to maintain good growth and maintain the buy rating.
Key points supporting rating
Domestic and foreign double wheel drive revenue and profit increased against the trend. In 2021, the company’s net profit was RMB 1.66 billion, an increase of 96.9% and 25.2% after restoring goodwill. In 2022q1, the net profit of the company was 440 million, an increase of 15.1% at the same time. The revenue and profit still maintained a high growth rate under the background of repeated epidemic. By product, the company’s sofa revenue in 2021 was 9.27 billion, an increase of 44.5%, and the revenue maintained a high growth driven by domestic and foreign sales. Mattress revenue reached 3.34 billion yuan, an increase of 48.7% at the same time. The improvement of brand strength boosted the high growth of revenue. The revenue from customized home furnishings was 660 million, an increase of 44.8% at the same time. The strength of high-quality software products drove the rapid and large-scale volume of customized home furnishing business. In terms of regions, the domestic / export revenue was 10.71/6.92 billion, an increase of 40.1% / 48.7%. On the one hand, the company actively promoted the integration of large stores, promoted the coordinated development of multiple categories, and the number of integrated stores increased rapidly. On the other hand, the adjustment of the company’s organizational structure improved the terminal sales capacity. The high growth in the overseas market is mainly due to the company’s increasing sales of functional sofas in the North American market and promoting the matching of high, medium and low-end series with consumer demand. Generally speaking, the growth momentum of the company’s domestic and export markets is sufficient.
The expenses were well controlled, and the net interest rate fluctuated due to the epidemic. In 2021, the gross profit margin of the company was 28.9%, down 6.3pct at the same time, mainly due to the change of accounting standards and the increase of the proportion of export revenue. The gross profit margin increased year-on-year due to the change of product structure in 2022q1. Generally speaking, the profit of the company’s products was stable. The company’s expense control is good, and the management expense rate decreased by 0.56pct in 2021. In 2022, the net profit margin of Q1 company was 10.1%, down 3.7pct at the same time, which was mainly due to the impact of the epidemic in some areas, and the sales expense investment did not achieve good results. We expect that the net profit margin after the epidemic is expected to maintain a recovery trend.
It is optimistic that the company will maintain rapid development driven by domestic and foreign sales. Domestic end companies improve terminal sales efficiency and consumer brand awareness through organizational structure reform. At the same time, the company will vigorously build integrated stores and accelerate the expansion of mattress and customized business channels, which is expected to promote the rapid and large-scale development of new categories. On the one hand, export end companies expand production capacity and improve the supply chain, on the other hand, actively enrich the product matrix. We are optimistic that the company will maintain a relatively high-speed development in revenue and performance driven by domestic and foreign sales.
Valuation
Under the current share capital, the earnings per share from 2021 to 2023 are expected to be 3.3/4.1/4.9 yuan respectively; The P / E ratio was 18 / 15 / 12 times respectively, maintaining the buy rating.
Main risks of rating
Raw material prices fluctuated, Sino US trade frictions intensified, and the expansion of new categories did not meet expectations.
