\u3000\u3 Shengda Resources Co.Ltd(000603) 008 Xlinmen Furniture Co.Ltd(603008) )
Key investment points
The performance is basically in line with market expectations, and the epidemic has brought short-term disturbance. The company achieved an operating revenue of 1.405 billion yuan in 2022q1, a year-on-year increase of + 12.35%; The net profit attributable to the parent company was 54 million yuan, a year-on-year increase of – 36.18%; The net profit attributable to the parent company after deduction was 49 million yuan, a year-on-year increase of + 12.85%.
Q2 promotion is planned to be strengthened, and the demand is expected to be replenished quickly after the epidemic situation improves. Under the 2022q1 epidemic, the income growth rate was slightly suppressed; On the profit side, the decline in net profit attributable to the parent company is mainly due to the impact of non recurring profit and loss changes, including income from equity disposal of film and television companies, profit and loss from changes in the fair value of financial assets, etc. In the follow-up, the impact of 2022q2 epidemic continues, but the company plans to strengthen the promotion activities from May to June. If the national epidemic situation improves in May, the performance of 2022q2 is still expected to maintain good growth, and 2022h2 is expected to usher in demand replenishment.
Xlinmen Furniture Co.Ltd(603008) brand has maintained good growth under the epidemic situation. 1) Independent brand retail: the revenue of 2022q1 was 918 million yuan, a year-on-year increase of + 20%; The offline revenue was 694 million yuan, a year-on-year increase of + 16%; Online revenue was 223 million yuan, a year-on-year increase of + 31%. By brand, Xlinmen Furniture Co.Ltd(603008) brand revenue increased by more than 20% year-on-year. As the customer base of high-end brand MD is more concentrated in the first tier cities seriously affected by the epidemic and has higher offline dependence, the revenue decreased by about 15% year-on-year. In 2022q1, the company opened 94 to 4587 new stores, including Xlinmen Furniture Co.Ltd(603008) (excluding Ximian), Ximian, MD and xiatu, 69, 23 and 2 new stores respectively. 2) Independent brand engineering business: the revenue was 39 million yuan, a year-on-year increase of – 42%; The main partners of independent brand engineering business are hotel customers, which are greatly affected by the epidemic. 3) Agent processing business: the revenue was 448 million yuan, a year-on-year increase of + 8%.
Profitability remained stable and cash flow was under short-term pressure. 2022q1 gross profit margin -0.21pp to 34.26% year-on-year; Net profit margin on sales rose from -3.46pp to 4.33% year-on-year (mainly due to non recurring profit and loss). In terms of period expenses, the sales expense rate is -1.46pp to 19.93%; Management expense ratio (including R & D expense ratio of 2.81%) increased from + 1.56pp to 9.21% year-on-year (mainly due to the improvement of talent introduction in 2021); The financial expense ratio increased from + 0.47pp to 1.33% year-on-year. In 2022q1, the operating cash flow was -551 million yuan, a year-on-year increase of -163.03%. The short-term pressure on cash flow is mainly due to the increase in support for dealers and suppliers and the year-on-year increase in bonus payment in 2021.
Profit forecast and investment rating: independent brands grow rapidly, channel expansion accelerates, and maintain the company’s profit forecast from 2022 to 2023. We expect the net profit attributable to the parent company to be RMB 730, 930 and 1.2 billion from 2022 to 2024 (equity incentive target is RMB 715, 925 and 1.207 billion), corresponding to pe14, 11 and 9x. The development momentum of independent brands is strong. Option incentive and employee stock ownership highlight the development confidence of the management and maintain the “buy” rating.
Risk tip: the price of raw materials fluctuates, the industry competition intensifies, and the channel expansion is less than we expected
