DEA shares (301177)
Recently, the company released the annual report of 2021 and the report of the first quarter of 2022. In 2021, the company achieved a year-on-year increase of 87.57% / 131.09% / 132.05% in operating revenue, net profit and basic earnings per share respectively. The company's 2022q1 revenue and net profit increased by 12.61% / 16.77% year-on-year respectively. The company's performance growth in 2021 is in line with expectations, mainly due to the establishment of brand image through marketing diversification strategy; Optimize product end structure and strengthen R & D; The channel end direct and associated stores continued to expand, while the online business maintained growth. Product side: diamond ring business continues to grow rapidly, R & D and innovation improve the product matrix
During the reporting period, the revenue of the company's main products, such as proposing diamond rings, wedding rings and other accessories, increased by 95.94%, 56.23% and 166.89% year-on-year respectively; Among them, the gross profit margin of diamond proposal ring, wedding ring and other accessories increased by 0.55pct/0.92pct/10.24pct to 71.34% / 68% / 63.29% respectively.
From the perspective of product R & D and innovation, 2021 company has applied for 142 design patents and 1 utility model patent, and launched 131 new models. The revenue contributed by new products accounts for more than 12% of the annual operating revenue. The new series include lovemark series, loveplace series, roselove series, redhead series, outdoor series and D series.
Channel side: quickly expand stores and improve store efficiency
In 2021, the company vigorously expanded its offline sales channels, and the number of offline stores maintained a rapid growth rate. At the end of the reporting period, the number of stores of the company was 461, an increase of 30.59% compared with 353 stores at the beginning of the period, including 130 new stores, 22 closed stores and a net increase of 108 stores in 2021.
By channel, in 2021, the company's operating revenue from online self operation, offline direct operation, offline joint operation, offline distribution and other businesses accounted for 12.95%, 79.47%, 6.96%, 0.02% and 0.61% of the company's annual operating revenue respectively, with a year-on-year increase of 168.40%, 71.77%, 700.33% and 71.33% respectively. Among them, the offline distribution business is the business carried out by the wholly-owned subsidiary cabo Shenzhen in the second half of 2020, and other business income is mainly due to the increase in the disposal of products to be processed.
In 2021, the operating revenue, gross profit and floor efficiency of the company's Direct stores increased by 41.83%, 43.59% and 48.21% respectively over the same period of last year; The operating revenue, gross profit and floor efficiency of associated stores increased by 40.54%, 42.94% and 35.97% respectively compared with the same period of the previous year. The company paid equal attention to the strategy of expanding store quality, brand influence and operation ability.
In terms of expenses, the total expenses of the company during the reporting period were 1.433 billion yuan, an increase of 56.22% over the same period of the previous year, of which the sales expenses were 1.218 billion yuan, an increase of 67.05% over the same period of the previous year. The main reason is that the current period continued a good business trend, the business scale increased significantly year-on-year, and the number of stores and salespeople increased rapidly, resulting in a rapid increase in wages and salaries, marketing expenses, store lease related expenses and so on.
Affected by the epidemic in 2022q1, the speed of revenue and store expansion slowed down
From January to February in 2022, the revenue reached 796 million, with a year-on-year increase of about 32%, while in March, affected by the epidemic, the monthly revenue was about 430 million. In the first quarter, the year-on-year growth of overall revenue fell to 12.61%, far lower than 32% from January to February, but still showing positive growth.
In 2022q1, the sales expenses increased by 39.08% year-on-year to 337 million, which was 12.61% higher than that in Q1. The proportion of sales expenses increased significantly due to the increase of stores, personnel expenses, mall channel expenses and promotion expenses.
In 2022q1, a total of 18 stores were expanded, and 8 / 1 / 9 stores were opened respectively from January to March, including 3 stores in Hebei and Shaanxi, which were the main expansion areas in the first quarter. Compared with the opening of 20 more stores in a single month in December 2021, the expansion speed has slowed down significantly.
Expand the audience, continue to expand stores, and empower offline stores with corporate culture.
The company will adjust brand communication through communication channels and traditional media promotion tests, and expand the user group from suitors and married people to all people with emotional expression needs, including married people and hot lovers.
In 2022, the company plans to open more than 200 new stores. In terms of improving store experience and service experience, the company will mainly start with corporate culture, pursue store expansion quality, and establish a marketing model to meet market demand and consumer expectations. When the epidemic situation returns to stability, the revenue is expected to further grow significantly in 2022.
Investment suggestion: we estimate that the operating revenue of the company from 2022 to 2024 will be 5.767 billion yuan, 7.387 billion yuan and 9.044 billion yuan respectively, and the net profit attributable to the parent company will be 1.483 billion yuan, 1.885 billion yuan and 2.31 billion yuan, corresponding to PE of 15.48x, 12.18x and 9.94x. Give a "buy" rating.
Risk tips: the risk of repeated epidemic, the risk of declining brand influence, the risk of outsourced production and the risk of intensified market competition.
