\u3000\u3 Guocheng Mining Co.Ltd(000688) 793 Shenzhen Breo Technology Co.Ltd(688793) )
Core view
The company's revenue in 2021 is + 44% to 1.19 billion yuan, and the net profit attributable to the parent company is + 30% to 90 million yuan, of which 2021q4 revenue is + 24% to 380 million yuan, and the net profit is - 32% to 30 million yuan. In 2022, Q1 revenue will be + 15% to 250 million yuan, and the net profit attributable to the parent company will be - 189% to - 10 million yuan. The total dividend in 2021 is 67 million (including tax). The company issued a restricted stock incentive plan, and the assessment target of annual growth rate of income / net profit from 2022 to 24 is 30% / 30%. 2021 new products + new channels drive growth. By channel, in 2021, the online revenue will be + 58% to 680 million and the offline revenue will be + 26% to 440 million. The advantages of offline channels have been consolidated, with a total of 186 stores at the end of the period (a net increase of 21), and new channels such as high-speed railway and community have been expanded. In terms of products, while maintaining the advantages of eye and head massagers, the sales market share of neck massagers ranges from + 5.5pct to 9.5% (detected by business consultants), and the income of neck, eye and head ranges from + 50%, + 19%, + 11%, further balancing the income structure. In addition, in 2021, dream 6 head, moxibustion box, C2 neck and other new products further enriched the category and positioning.
Profitability is under pressure in the short term, but there is still much room for recovery. In 2021, the comparable gross profit margin is - 0.5pct to 56.7%. If the expenses are treated with the same caliber, the gross profit margin in 2021q4 is expected to be - 4.0pct to 50.5%, and the gross profit margin in 2022q1 is expected to be - 2.8pct to 53.9%. In addition to the pressure on raw materials, the decline in gross profit margin may also come from the increase in the price of flow products launched by Q4 and the increase in the proportion of online products. Although the offline gross profit margin was affected by the epidemic - 1.1pct to 61.9% in 2021, the online gross profit margin increased by 0.2pct to 59.8% through structural adjustment. Therefore, if the offline business is further restored and the year-on-year pressure of superimposed raw materials is gradually reduced, there is still much room for the recovery of gross profit margin. In 2021, the comparable sales / R & D / management / financial expense rate is + 0.5 / - 0.5 / - 0.5 / + 0.4pct, and the annual gross sales difference is -0.35pct. In 2022q1, the expense rate is affected by the slowdown of revenue growth. The sales / R & D / management / financial expense rate is + 3.6 / + 1.0 / + 1.3 / - 0.5pct, and the gross sales difference in a single quarter is -8.2pct.
The channel structure improves the operation efficiency. In 2021, the turnover days of inventory / accounts receivable were - 6 / - 10 days, or from the optimization brought by the increase of the proportion of online 2C and other businesses. Although the net operating cash turned negative to 70 million in 2022q1 under the pressure of raw materials, the company's liquidity remained abundant at the end of 22q1. It is expected that with the gradual reduction of the impact of the epidemic, the recovery of advanced inflow at the income side still provides a guarantee for expansion. The coverage of equity incentive and the target of 30% revenue and profit growth demonstrate long-term confidence. The number of incentive shares granted this time accounts for 2.9% of the total share capital, covering 14% of the employees, of which the incentive shares of middle-level personnel account for 85%, the share purchase price is 27.4 yuan / share, and the cost amortization from 2022 to 2024 is 12, 14 and 06 million yuan.
The assessment of 20222024 is based on 2021, and the revenue and profit increase by 30%, 60% and 120% (30% year-on-year). The high growth target shows the long-term confidence of the company's development.
Risk tip: offline channel expansion is less than expected, industry competition intensifies, and online growth is less than expected.
Investment suggestion: lower the profit forecast and maintain the "buy" rating.
Considering the impact of the epidemic on the offline and the pressure on the cost of raw materials, the profit forecast is lowered. The net profit attributable to the parent company is expected to be 120, 160 and 210 million yuan from 2022 to 2024 (the previous value is 140 and 200 million yuan from 202223), with a year-on-year growth rate of 31%, 30% and 33%. The current stock price corresponds to PE = 28, 22 and 16x. Maintain the "buy" rating.
