\u3000\u3 China Vanke Co.Ltd(000002) 860 Hangzhou Star Shuaier Electric Appliance Co.Ltd(002860) )
Performance summary: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 1.37 billion yuan, a year-on-year increase of 47.6%; The net profit attributable to the parent company was 140 million yuan, a year-on-year increase of 33.4%; The net profit attributable to the parent company after non deduction was 130 million yuan, with a year-on-year increase of 30.7%. In Q4, the company achieved a revenue of 310million yuan, a year-on-year increase of 20.6%; The net profit attributable to the parent company was 9.567 million yuan, a year-on-year decrease of 49.7%. In 2022q1, the company achieved a revenue of 290 million yuan, a year-on-year decrease of 16.1%; The net profit attributable to the parent company was 37.645 million yuan, a year-on-year decrease of 23.9%. In addition, the company plans to convert every 10 shares into 4 shares and distribute a cash dividend of 1.5 yuan (including tax), with a dividend rate of 16.7%.
Photovoltaic contributed to the growth momentum, while white electricity and motors grew steadily. In March 2021, the company acquired fule new energy to enter the photovoltaic field. In 2021, the photovoltaic business contributed 250 million yuan of revenue to the company, accounting for 18.6% of the total revenue; The company’s white power business / motor business grew steadily, with a year-on-year increase of 11.0% / 52.8% to 8.7/180 billion yuan, accounting for 63.4% / 13.4% of the total revenue respectively.
With the capital increase of fule new energy, photovoltaic is expected to continue in large quantities. The company plans to invest 240 million yuan more in fule new energy and acquire 39.2% of its equity. After the acquisition, the shareholding ratio of the company will reach 90.2%. This transaction is conducive to accelerating the company’s march in the photovoltaic field. With the capacity climb of fule new energy photovoltaic module phase I Project “annual output of 1GW photovoltaic module project” and the promotion of phase II project “annual output of 2gw high power generation photovoltaic module project”, the company’s photovoltaic business is expected to continue to expand. It is expected that after 2023, the company will have a capacity of 3.5gW photovoltaic modules, which will help the company fully enjoy the dividends of the rapid growth of the photovoltaic industry.
Profitability is under pressure. In 2021, the company’s comprehensive gross profit margin was 21.5%, a year-on-year decrease of 4.6pp, of which Q4 gross profit margin was 14.2%, a year-on-year decrease of 7.8pp. There are two main reasons for the sharp decline in gross profit margin: 1) the sharp rise in the price of raw materials; 2) The PV business is in large volume quarter by quarter, but the gross profit margin is relatively low, which lowers the overall gross profit margin. In 2021, the gross profit margins of white power business / PV business / motor business are 28.3% / 8.6% / 10.5% respectively. In terms of expenses, the company’s sales expense rate / management expense rate / R & D expense rate / financial expense rate were 0.8% / 4.6% / 3.6% / 1.1% respectively, with a year-on-year decrease of 0.2% / 1.8% / 0.4% / 0.2% respectively. Overall, the company’s net interest rate was 11.1%, a year-on-year decrease of 0.8pp.
Q1 revenue performance is under pressure. In terms of revenue, due to the repeated epidemic and other factors, the decline of downstream white power demand led to the decline of the company’s revenue. According to AVC data, the retail sales of household appliances in China in 2022q1 was 143 billion yuan, a year-on-year decrease of 11.1%. In terms of gross profit margin, due to the continuous rise of raw material prices and the continuous adjustment of revenue structure, the gross profit margin of 2022q1 company decreased by 1.4pp to 24.5% year-on-year. In terms of expenses, the sales expense rate / management expense rate / R & D expense rate increased by 0.3pp/0.1pp/2pp to 1% / 4% / 4.4% year-on-year respectively, and the financial expense rate decreased by 1.1pp to 0.02% year-on-year. Overall, the company’s net profit margin was 13.6%, down 0.9pp year-on-year.
Profit forecast and investment suggestions. Considering the steady growth of the company’s white electricity business and the gradual volume of photovoltaic business, it is expected that the company’s EPS will be 0.85 yuan, 1.03 yuan and 1.31 yuan respectively from 2022 to 2024, maintaining the “buy” rating.
Risk tip: the price of raw materials continues to rise, and the demand of downstream white power industry is lower than expected.
