\u3000\u3 Shengda Resources Co.Ltd(000603) 816 Jason Furniture (Hangzhou) Co.Ltd(603816) )
Event: the company released the first quarter results of 21 and 22 years. In 2021, the revenue was 18.342 billion yuan, a year-on-year increase of + 44.81%; The net profit attributable to the parent company was 1.664 billion yuan, a year-on-year increase of + 25.16% (the year-on-year data of profit in 2021 were obtained after excluding the impairment of goodwill in 2020, the same below). Among them, Q4 revenue was 5.117 billion yuan, a year-on-year increase of + 24.16%; The net profit attributable to the parent company was 427 million yuan, a year-on-year increase of + 33.45%. 2022q1 revenue was 45.40 yuan, a year-on-year increase of + 20.05%; The net profit attributable to the parent company was 443 million yuan, a year-on-year increase of + 15.11%.
The big home strategy has been steadily promoted, and the category connection rate has been improved. By category, in 2021, the revenue of sofa, bed products, integrated products and customized products reached 92.67 billion yuan, 33.38 billion yuan, 3.140 billion yuan and 660 million yuan respectively, with a year-on-year increase of + 44.51%, + 42.75%, + 41.12% and + 44.79%. In addition, the revenue from information technology services was 930 million yuan, a year-on-year increase of + 48.63%. As the core business of the company, sofa continues to maintain high growth, mainly due to the smooth expansion of the price belt: natuz and lazboy, which are positioned as high-end, and Tianxi school, which is positioned as young, have achieved rapid growth. The three high potential categories of functional sofas, beds and customized furniture are growing rapidly, mainly through the expansion of stores and the improvement of the joint rate: the company’s category comprehensive store is expanding smoothly. At present, the joint rate of software customization has reached 30%, and the joint rate between sofas, beds and integrated products has reached 40%, promoting the continuous improvement of customer unit price. Relying on the channel and brand advantages accumulated in sofa categories, the company expands category boundaries, which is the main reason for the rapid growth of multiple categories. With the help of store informatization, the company manages high potential categories in a unified way, and unifies the styles of various categories in terms of design, so as to realize the home solution with unified style, which is expected to promote the sustainable and rapid development of multiple categories.
Domestic sales channels have been expanded rapidly, and the growth of large stores has contributed to category synergy. In 2021, the domestic sales revenue was 10.712 billion yuan, with a year-on-year increase of + 40.05%, of which the domestic sales revenue of H2 was + 29%. 22q1 still achieved steady growth under the influence of the epidemic. In terms of channels, by the end of the 21st century, the total number of stores of the company was 6456, with 1768 newly opened, 2003 closed and 235 net closed during the year. The number of head offices has decreased, but under the guidance of 1 + N + X mode, the company continues to promote the construction of large stores. At present, there are 541 large stores, including 108 customized + software integration stores, and the proportion of large stores has increased from 4% to 11%. By opening large stores, strengthening category coordination and deeply cultivating the advantageous market, the company has brought about the improvement of joint and several rate and customer unit price, realized the significant improvement of store efficiency, and became the main driving force for the growth of domestic sales revenue. In terms of channel mode, the company strengthens the overall channel management through regional retail centers, improves the operation efficiency of stores through store informatization, and helps the company expand smoothly in the 1 + N + X mode. Considering that multiple categories bring more space for the company to open stores, the company’s domestic sales business is expected to continue to grow.
Export sales maintained rapid growth, supply chain efficiency was improved, and orders were full. In 21 years, the export revenue was 6.918 billion yuan, with a year-on-year increase of + 48.68%, of which the export of H2 was + 29% year-on-year, which still achieved rapid growth under the high base. The export of 22q1 continued to grow, and the orders are full at present. The export of mattresses continued to grow, with a growth rate of more than 100% in 2021, mainly benefiting from the release of production capacity and good demand in Mexico. Excellent product strength and solid overseas customer base have promoted the sustained and rapid growth of export business. With the promotion of the integration of export value chain and the improvement of the overall supply chain efficiency, the export business is expected to continue to grow. At the same time, the export profit margin has also been improved in 22q1. It is expected to rise further in the future with the decline of sea freight and the improvement of efficiency.
Profitability gradually improved and cash flow fluctuated temporarily. The gross profit margin in 2021 was 28.87%. Excluding the impact of freight transfer in cost, it was -1.10pct year-on-year, which was mainly affected by the rise in the price of raw materials. In 2021, the company raised prices in March and October respectively to offset part of the cost impact. In 22q1, after excluding the impact of transportation, the gross profit margin has achieved positive year-on-year growth. The sales expense ratio / management expense ratio is 14.74% / 1.79%. After reducing the transportation expenses, the year-on-year rate is + 0.29pct / – 0.55pct, and the expense ratio remains stable. The net profit margin of the company was 9.07%, which was -1.42pct year-on-year after excluding the impairment of goodwill, which was mainly affected by the gross profit margin. 22q1 after the gross profit margin recovered, the net profit margin was 8.42%, with a year-on-year increase under the condition of reduced subsidies. We believe that the price of main raw materials of software will be stable in 2022, and the sea freight will drop slightly. It is expected that the gross profit margin will remain stable and upward in the future. In terms of cash flow, the net operating cash flow of the company was 2.041 billion yuan in 2021, a year-on-year increase of – 6.41%; 22q1 was – 530 million yuan, compared with 130 million yuan in the same period last year, mainly due to the increased assistance to dealers during the epidemic in the first quarter and the adjustment of the payment collection cycle. In the future, as the impact of the epidemic slows down, the cash flow is expected to return to normal.
Profit forecast and investment rating: we believe that the current brand value of upholstery furniture has improved. Jason Furniture (Hangzhou) Co.Ltd(603816) as a leader in the industry, it is expected to continue to expand the category boundary and increase the company’s share by virtue of the brand advantage. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 2.098 billion, RMB 2.541 billion and RMB 3.48 billion, RMB 4.21 billion and RMB 5.14 billion respectively, and the corresponding PE of the current stock price is 17.13, 14.14 and 11.58 times respectively. We maintain the “recommended” rating.
Risk tip: the epidemic situation exceeded expectations, the price rise of raw materials exceeded expectations, and the price rise of sea freight exceeded expectations.
