\u3000\u3 Guocheng Mining Co.Ltd(000688) 793 Shenzhen Breo Technology Co.Ltd(688793) )
Event: in 2021, the company achieved an operating revenue of 1.190 billion yuan, a year-on-year increase of + 43.93%, and a net profit attributable to the parent company of 92 million yuan, a year-on-year increase of + 29.92%.
The epidemic affected offline sales, and the growth rate of the company slowed down month on month:
21q4 company achieved an operating revenue of 376 million yuan, a year-on-year increase of + 23.77%. 22q1 company achieved an operating revenue of 248 million yuan, a year-on-year increase of + 15.29%. The growth rate slowed down compared with the first three quarters of 21 years (+ 62.42 / + 66.62 / + 39.80%).
In terms of products, the company’s head / neck / eyes / scalp / other products achieved revenue of 91 / 3.10 / 2.99 / 1.22 / 306 million yuan respectively in 21 years, with a year-on-year increase of + 11.11 / + 50.19 / + 19.35 / + 1.6 / + 71.44% respectively. The high increase in revenue of other products was mainly due to the hot sales of waist and back, shoulders, health sports and promotional gift boxes. Moxibustion products, as a new category of the company in 21 years, achieved an operating revenue of 60.245 million yuan, accounting for 5.06% of the company’s operating revenue, The repurchase rate brought by the consumables operation mode of moxibustion products effectively reduces the company’s customer acquisition cost and improves customer stickiness. The company’s new product revenue accounted for 19.89% in 21 years.
In terms of regions, the revenue of the Mainland / Hong Kong, Macao, Taiwan and other regions in 21 years was 1.063125 billion yuan respectively, with a year-on-year increase of + 52.44/59.14%, and that of H2 was + 30.60 / + 26.11% respectively. In the future, the company will establish a global distribution network, focusing on the development of overseas markets such as the United States, Russia, Japan and Southeast Asia.
In terms of sub channels, the company has increased investment in online channels since 20 years, and the online revenue and scale have increased rapidly, aiming at offline channels. The Wuxi Online Offline Communication Information Technology Co.Ltd(300959) revenue of the company in the 21st year was + 58.44 / + 26.05% year-on-year respectively, and the revenue of offline channels accounted for 36.96%, which was -5.20pct compared with the same period in the 20th year.
In the 21st year, the company’s ODM business increased by + 45.16% year-on-year, mainly from Russian customer orders. The 22q1 epidemic repeatedly impacted the company’s offline channels, and Q1 Wuxi Online Offline Communication Information Technology Co.Ltd(300959) revenue was + 48.77 / – 15.38% year-on-year respectively.
Increase the investment in R & D resources and adjust the product structure through new product iteration: in 2021, the company and Q4 achieved a gross profit margin of 56.73/50.00% respectively. Due to the change of accounting standards, the gross profit margin of the whole year and Q4 was -0.51 / – 6.5pct year-on-year respectively, and 22q1 achieved a gross profit margin of 53.92% year-on-year -2.78pct.
In terms of products, the company adheres to the high-end brand strategy, continuously improves the product performance, functional richness and intelligence level, and widens the product price band. In 21 years, the company has successively launched a series of new products such as head dream6 and neck neckc2. In 21 years, the average price of the company’s JD platform was + 11.33% year-on-year. However, against the background of the sharp rise in the cost of raw materials, the company’s gross profit margin still fell to a certain extent. The gross profit margins of head / neck / eyes / scalp / other products were 60.79/65.29/51.94/63.57/48.97% respectively, with a year-on-year increase of -3.92 / – 0.49 / – 0.89 / + 0.35 / + 3.81pct respectively.
From the perspective of channels, the company not only arranges Direct stores in the first and second tier cities, but also actively promotes the sinking of channels, explores and improves the cooperation modes such as Ka chain, agent franchise and channel distribution, and covers more consumer groups. Because the distribution mode and ODM mode can not immediately adjust the price of ordered products, the profitability is relatively damaged. In the 21st year, the gross profit margin of ODM / online distribution / online platform warehousing / online direct sales / offline distribution / offline direct sales of the company was -5.64 / – 12.15 / + 4.67 / + 0.22 / – 5.37 / – 0.57pct year-on-year respectively.
In terms of expense ratio, the company’s sales / management / R & D / financial expense ratio in the past 21 years was -0.65 / – 0.03 / – 0.50 / + 0.39pct year-on-year respectively, and Q4 was -0.58 / + 0.66 / + 0.78 / + 0.62pct year-on-year respectively. In order to accelerate the promotion of new products and enhance the brand influence, 22q1 company increased the investment in sales and R & D expenses again. The Q1 sales / management / R & D / financial expense ratio was + 3.62 / + 1.05 / + 1.27 / – 0.51pct year-on-year respectively.
Although the company has carried out flow control fees in 21 years, the net profit margin of the company in 21 years still decreased slightly by 0.78pct to 7.75%, and the net profit margin of Q4 was 6.97%, with a year-on-year increase of -5.54pct. As a result of the 22q1 epidemic, the offline revenue was lower than expected, and the company suffered a small loss due to the accelerated launch of superimposed sales and R & D expenses.
Book cash increased significantly and inventory turnover efficiency decreased:
1) at the end of 22q1, the company’s monetary capital + other current assets totaled 229 million yuan, up 28.19% from the end of 21, mainly due to the redemption of the company’s structural deposits and financial products; Notes receivable and accounts receivable totaled 74 million yuan, down from – 8.35% at the beginning of the period; In order to cope with the rising cost of raw materials, the company prepared a large number of goods in 21 years. The inventory was + 46.30% year-on-year, of which the inventory of goods was + 74.60% year-on-year and the inventory of 22q1 was – 4.79%; 22The accounts payable at the end of Q1 was 52 million yuan, up from – 63.33% at the beginning of the period, mainly due to the decrease of purchase amount of Q1 company and the timely payment of goods.
2) from the perspective of turnover, the turnover days of the company’s inventory / accounts receivable / accounts payable in 21 years were -6.16 / – 9.99 / – 47.88 days respectively year-on-year. In 22q1, the turnover days of the company’s inventory affected by the epidemic were + 37.17 days, and the turnover days of accounts receivable also increased slightly by + 3.54 days. Due to the reduction of purchase amount, the turnover days of accounts payable were -26.58 days.
3) the net cash flow from 22q1 operating activities was -72 million yuan, compared with -17 million yuan in the same period of 21 years, which was mainly due to the serious decline of the company’s offline sales caused by the epidemic.
Profit forecast and investment rating: we are optimistic about the industry growth space of portable intelligent massage instrument for a long time. As a leading enterprise of portable massage instrument in China, the company actively develops new categories of Chinese massage instrument, accelerates product iteration, also increases the promotion of new media platform in marketing, cooperates with Lamborghini to create an international high-end brand image, and lays a foundation for the brand’s strategy of going to sea. We believe that with the improvement of the epidemic situation in Q2, the company’s offline sales are expected to pick up, and the Q2 new product launch will also drive the company’s new product sales scale. According to the assessment objectives of equity incentive, the company’s revenue and net profit in 22-24 years increased by no less than 30 / 69 / 119.7% respectively compared with that in 21 years, that is, the revenue in 22-24 years was no less than 1.547/2.011/2.614 billion yuan respectively, and the net profit was no less than 120 / 155 / 202 million yuan respectively.
We estimate that the company’s operating revenue in 22-24 years will be RMB 1.638/22.96/3.073 billion, with a year-on-year increase of + 37.7 / + 40.2 / + 33.8%. It is estimated that the net profit attributable to the parent company in 22-24 years will be RMB 124181/255 million, with a year-on-year change of + 34.6 / + 46.5 / + 41.0%, corresponding to pe27.7% 49 / 18.77/13.31 times, maintaining the “buy” rating.
Risk factors: the epidemic affects offline channel sales, the launch of new products is less than expected, the cost and price of raw materials remain high, and the development of overseas markets is less than expected
