\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 94 Joy Kie Corporation Limited(300994) )
Event: the company has disclosed the 21st Annual Report and 22q1 quarterly report. The company’s revenue in 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%. Among them, Q4 revenue was 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 slight decrease of 5.48% over the same period. In 2021, the basic earnings per share is 1.27 yuan, and it is proposed to distribute a cash dividend of 6.8 yuan (including tax) for every 10 shares, with a cash dividend ratio of 53%. In 2022q1, the revenue was 774 million yuan, a year-on-year increase of + 3.31%; The net profit attributable to the parent company was 42.48 million yuan, a year-on-year increase of + 27.41%; Deduct 42.48 million yuan of non parent net profit, a year-on-year increase of + 30.38%.
Bicycle exports are booming, and the business of independent brands is expanding smoothly. In terms of products, the revenue of adult bicycles, children’s bicycles, power assisted electric vehicles and accessories of the company in 21 years was 12.15/7.43/3.57/1.240 billion yuan respectively, with a year-on-year growth rate of 100.50%, 33.69%, 101.06% and 73.91% respectively. The growth of adult bicycles and power assisted electric vehicles was brilliant. In 2021, China exported 69.26 million bicycles, a year-on-year increase of 14.9%; The export value was US $5.108 billion, a year-on-year increase of 40.0%. With years of deep cultivation in markets around the world, the company can timely design or adjust products according to the specific needs of customers, so that the company has seized the industry opportunity of 21 years and rapidly expanded its market share. In terms of business model, the company’s OBM business realized a revenue of 466 million yuan, a year-on-year increase of 31%; ODM business realized a revenue of 2.258 billion yuan, a year-on-year increase of 72.73%, and trade mode revenue of 969 million yuan, a year-on-year increase of 59.16%. During this period, the company’s independent brand business achieved steady development, and the OEM business achieved rapid growth with the help of downstream channels and brands. Quarter by quarter: the revenue growth rate of 21q4 was 25%, which slowed down compared with the previous three quarters, mainly due to the impact of shipping capacity (Q4 is the peak season of online business, which has a serious impact on the transportation capacity and dragged down the growth of the whole year), as well as the sales allowance made to some customers under the influence of the Russian Ukrainian war, which offset Q4 revenue (the company’s major customer “expressunion” is in Ukraine, and the revenue accounted for 5.2% in 2021). 22q1 revenue grew by 3.31%, mainly due to the prolonged factory downtime caused by the East Olympic Games, the poor passage of maritime ports under the influence of the epidemic and the continuous impact of the Russian Ukrainian war. We believe that the growth rate of the company’s revenue in the past two quarters has been affected by external factors, but the company’s strategic development direction is to vigorously develop the business of power assisted electric vehicles and independent brands on the premise of consolidating the advantages of bicycle business. After the elimination of external factors in the future, the company’s revenue will return to a faster growth rhythm.
Profitability is under pressure in the short term and is optimistic about its recovery in the future. In 2021, if excluding the impact of freight transfer in cost, the gross profit margin of comparable caliber was about 16.82%, with a year-on-year increase of -3.34pct, which was mainly affected by the price rise of raw materials, the rise of sea freight and the increase of sales allowance to customers. After the sales expense rate is transferred back to the expense account, it is about 8.09% under the comparable caliber, with a year-on-year decrease of 1.39 percentage points, reflecting a good operating leverage effect; The rate of administrative expenses was 1.28%, a year-on-year decrease of 0.39 percentage points. Quarter by quarter: the profit margin of 21q4 was 5.2%, both year-on-year and month on month, mainly due to the sales allowance of Ukrainian customers. If this factor is restored, the profit margin is the same as that in the first three quarters. The profit margin of 22q1 was 5.4%, which increased significantly year-on-year, and the chain also reflected the trend of recovery. Analyze various reasons affecting the company’s profit margin: the current overall fluctuation range of raw materials is much less than that in 21 years, the impact on the gross profit margin is controllable, the long-term prospect of shipping freight will decline, and the sales allowance is also a short-term behavior; Favorable factors include the rapid depreciation of RMB exchange rate, which will have a favorable impact on the company’s gross profit margin and the conversion of accounts receivable. The growth rate of OBM business in 22 years will also be improved to boost the gross profit margin. Based on the comprehensive analysis, we believe that the profit margin of the company in the second quarter and the whole year will recover significantly.
The company helps to firmly promote the electric vehicle business and independent brand business, and is optimistic about the long-term development. Power assisted electric bicycles are still in the stage of rapid popularization in Europe and America. The company has accumulated many years of experience in the R & D and design of power assisted electric bicycles. On the premise of optimistic about the large amount of categories in Europe and the United States, especially in the United States, the company changed the fund-raising investment project “annual output of 1 million adult bicycles” to “annual output of 1 million bicycles and 1 million electric mopeds intelligent manufacturing project” and “annual output of 1.6 million bicycles, baby carriages and 400000 electric mopeds digital technology transformation project”. We will further strengthen our advantages in terms of production capacity and production technology. In terms of independent brands, the company’s independent brands have a certain popularity and influence in North America, South America, Southeast Asia and other countries. The online TOC business has also driven the purchase enthusiasm of dealers. In 21 years, the online tob business has achieved 40 million revenue, which shows the drive of TOC to tob, and is optimistic about the increase of the proportion of the company’s independent brand business in export sales in the future.
Profit forecast and investment rating: Based on the uncertainty of the external situation in 2022, we slightly adjust the revenue forecast, but maintain the performance forecast based on the information of profit margin. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 317, 425 and 543 million yuan respectively, and the EPS will be 163, 219 and 280 yuan respectively. At present, the corresponding PE of the stock price is 17.01, 12.70 and 9.94 times respectively. We maintain the “recommended” rating.
Risk tips: the epidemic situation exceeded expectations, the war time exceeded expectations, the price rise of raw materials exceeded expectations, the price rise of sea freight exceeded expectations, and the RMB exchange rate appreciated greatly.
