\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 94 Joy Kie Corporation Limited(300994) )
Event:
The company released the annual report of 2021: the annual revenue of 2021 was 3.71 billion yuan, a year-on-year increase of 62.31%; The net profit attributable to the parent company was 205 million yuan, a year-on-year increase of 30.91%; The net profit attributable to the parent company after non deduction was 189 million yuan, a year-on-year increase of 34.68%; The basic earnings per share is 1.27 yuan.
The company released the first quarterly report of 2022: the revenue in 2022q1 was 774 million yuan, a year-on-year increase of 3.31%; The net profit attributable to the parent company was 42 million yuan, a year-on-year increase of 27.41%; The net profit deducted from non parent company was 42 million yuan, with a year-on-year increase of 30.38%.
Guoyuan view:
In the second half of 2021, the cost side pressure is obvious, and the profit margin of 2022q1 is improved
In 2021, the company’s overseas revenue accounted for nearly 99%. Due to the great pressure on the cost side caused by the appreciation of RMB, the price of raw materials and the rise of sea freight, the unit production cost of bicycles increased from 291.07 yuan / vehicle in 2020 to 358.50 yuan / vehicle, with a year-on-year increase of + 23.17%. In 2021q4, the company increased revenue without increasing profit, realizing a revenue of 1.116 billion yuan, a year-on-year increase of + 24.82%; The net profit attributable to the parent company was 58 million yuan, a year-on-year increase of – 5.48%; The gross profit margin fell to 1.98%, with a year-on-year increase of -18.61pct and a month-on-month increase of -16.15pct, mainly due to the cost pressure and the adjustment of transportation costs from sales expenses to operating costs; The net interest rate was 5.20%, with a year-on-year ratio of -1.67pct and a month on month ratio of -0.89pct. In 2022q1, when the pressure on the cost and expense side is slightly improved, the company’s net interest rate is 5.49%, with a year-on-year increase of + 1.05pct and a month on month increase of + 0.29pct. If the RMB devalues, the cost of raw materials and sea freight is improved, the expense rate is effectively controlled, or the company’s profitability is further improved in the future.
The proportion of medium and high-end products increased, and the average sales price increased significantly
In 2021, the revenue of the company’s bicycle business (adult bicycle + children’s bicycle + power assisted electric bicycle) was 2.315 billion yuan, a year-on-year increase of + 72.86%; The sales volume was 5.55 million, with a year-on-year increase of + 46.90%, mainly due to the continuous impact of the epidemic, the reduction of foreign public transport travel and the sharp increase in the demand for bicycles; The inventory was 440000 vehicles, with a year-on-year increase of + 65.33%, mainly due to the rising sea freight, the shortage of containers and the increase of overseas e-commerce goods preparation, resulting in the backlog of goods in the port. In terms of products, the income of adult bicycles and power assisted electric bicycles increased significantly by 100.50% and 101.06% respectively compared with 2020, driving the average sales price of bicycles from 354.82 yuan / vehicle in 20 years to 417.50 yuan / vehicle in 21 years, a year-on-year increase of + 17.67%; Among them, the proportion of electric bicycle revenue with higher unit price increased from 7.78% to 9.63%.
The penetration rate of electric bicycle continues to improve, and the optimization of revenue structure is expected to repair the profitability
With the further increase of consumers’ acceptance of electric bicycles in the U.S. market and the continuous growth of the European market, the penetration rate of electric bicycles is expected to continue to increase in the future, driving the rapid growth of China’s export volume of electric bicycles. Considering that the company’s revenue from electric bicycles currently accounts for less than double digits, and the revenue from OBM mode of private brands accounts for only 12.56%, in the future, with the further volume of private brand electric bicycles such as Hiland overseas, it is expected that the revenue structure of the company will continue to be optimized in the future, and the profitability is expected to be improved in combination with the depreciation of RMB and the decline of raw material and sea freight costs.
Investment advice and profit forecast
The company’s own brand Wuxi Online Offline Communication Information Technology Co.Ltd(300959) channels have been expanded rapidly, the capacity expansion has been promoted in an orderly manner, the proportion of revenue from high gross profit products has continued to increase, and the medium and long-term prospects are promising. We estimate that the company’s revenue from 2022 to 2024 will be RMB 45.76/57.68/7.015 billion respectively, the net profit attributable to the parent company will be RMB 250/3.17/386million, the EPS will be RMB 1.29/1.63/1.99/share, and the corresponding PE will be 21.56/17.06/13.99 times, maintaining the “buy” rating.
Risk tips
Price fluctuation of raw materials; Market development is less than expected; Industry competition intensifies.
