\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 061 Hhc Changzhou Corp(301061) )
Core view:
On April 22, 2022 Hhc Changzhou Corp(301061) disclosed the annual report of the company in 2021. In 2021, the company realized an operating revenue of 1.925 billion yuan, a year-on-year increase of 46.04%; The net profit attributable to the shareholders of the listed company was 298 million yuan, an increase of 45.15% year-on-year. In the fourth quarter of 2021, the company achieved an operating revenue of 435 million yuan, a year-on-year decrease of 1.92%; The net profit attributable to the parent company reached 62 million yuan, a year-on-year increase of 21.27%.
In 2021, Americans who reduced their travel and gatherings paid more attention to “home improvement” because of the work and lifestyle at home caused by the epidemic. In 2021, the sales of furniture and bedding in the United States will reach nearly 120.4 billion US dollars, with a year-on-year increase of 4.5% compared with 2020, the highest increase since 2012, and the market will maintain a high boom. The company continues to focus on the development and service of the U.S. market. The company has developed 13 new customers throughout the year, of which 10 customers are headquartered in the United States, including Costco and miskelly’s furniture. Driven by the high outlook of the North American market, the sales revenue to the US market reached 1.68 billion yuan, a year-on-year increase of 43.43%. In addition to the U.S. market, the company newly expanded Leon’s, one of Canada’s largest furniture retailers. As a customer, the company’s sales revenue to Canada increased by 62.3% year-on-year.
In terms of profit level, the gross profit margin in 2021 decreased to 28.78%, down 6.67 percentage points year-on-year. On the whole, the reasons for the decline of the company’s gross profit margin mainly include the following two points: (1) the statistical caliber changes. In 2021, the freight forwarding and transportation expenses related to the performance obligations of revenue contracts were adjusted to the main business cost in the current period. It is estimated that the gross profit margin of the company is 32.99% according to the original caliber, with a year-on-year decrease of 2.46 percentage points; (2) With the rise of raw material prices and shipping costs, the company’s gross profit margin has declined.
Looking forward to the future, with the gradual regression of the impact of the epidemic, the growth of the North American home market is expected to decline in 2022, but the overall prosperity remains relatively high. However, considering that there are still some uncertainties in raw material prices and shipping, we believe that the company’s performance in 2022 is expected to show a steady growth trend.
