\u3000\u3 Guocheng Mining Co.Ltd(000688) 793 Shenzhen Breo Technology Co.Ltd(688793) )
2022q1 performance stage is under pressure, optimistic about the stabilization of the epidemic, the recovery of income growth, and maintain the “buy” rating
In 2021, the revenue was 1.19 billion yuan (+ 43.9%), and the net profit attributable to the parent company was 90 million yuan (+ 29.9%). In 2022q1, the revenue was 250 million yuan (+ 15.3%), and the net profit attributable to the parent company was – 10 million yuan (- 188.8%). The performance of 2022q1 is under pressure, mainly because the offline channels with high gross profit margin are disturbed by the epidemic. We lowered the profit forecast for 20222023 and added a new profit forecast for 2024. It is estimated that the net profit attributable to the parent company in 20222024 will be 121 / 161 / 210 million yuan (the original value in 20222023 is 182 / 272 million yuan), and the corresponding EPS will be 1.96/2.61/3.40 yuan respectively (the original value in 20222023 is 2.95/4.42 yuan). The current stock price corresponds to PE of 22.5/16.9/13.0 times. Considering the low penetration of massager categories, the company’s positioning with the help of high-end brands Product differentiation continues to lead, and the “buy” rating remains unchanged.
In 2021, neck massagers performed brilliantly, and moxibustion categories steadily expanded the second growth curve
In 2021, the company’s neck massager performed well and achieved a revenue of 310 million yuan (+ 49.8%). In 2021, the revenue of New Moxibustion categories reached 60 million yuan, accounting for 5.1% of the revenue. It is expected that there will still be iterative Jiang Xiaozhu moxibustion box products on the market before 618 in 2022, which is expected to drive the second growth curve and continue to build. In 2021, the company’s online B2C / e-commerce pingpintai warehousing / online distribution revenue was RMB 4.4/2.0/0.4/billion respectively, with a growth rate of + 61.9% / + 53.2% / + 49.0% respectively. It is expected that in 2022, the company will accelerate the revenue growth of offline distribution channels and build revenue increment by promoting pilot models such as high-speed rail marketing and franchise agency. In 2021, the company’s domestic / overseas business achieved a revenue of 1.06/120 billion yuan, with a year-on-year increase of + 42.4% / + 59.1% respectively. The overseas business expanded steadily.
We are optimistic about the mitigation of the epidemic, the continuous improvement of net interest rate month on month, and the high goal of equity incentive plan leads to long-term development
Affected by the sharp rise of raw materials and channel structure, the gross profit margin in 2021 was 56.7% (- 1.6pcts) and that in 2022q1 was 53.9% (- 2.8pcts), showing an improvement trend month on month. By channel, the gross profit margin of online B2C / e-commerce platform in 2021 was + 0.2 / + 4.7pcts respectively, and the product iteration had a positive effect on the structure. 2022q1 sales expense rate + 3.6pcts. It is expected that under the influence of the epidemic, the rent and other expenses of Direct stores may be reduced or exempted. The net interest rate in 2021 is 7.8% (- 0.8pcts) and that in 2022q1 is – 4.0% (- 9.2pcts). It is expected that the superposition of the slowdown of the epidemic will promote new benefits, and the net interest rate in Q2 may usher in an inflection point. The company launched a restricted stock incentive plan, corresponding to the growth rate of net profit from 2022 to 2024, which shall not be less than 30.0%, 69.0% and 119.7% respectively. High goals drive long-term development.
Risk tip: the expansion of new products does not meet expectations; Repeated disturbance of epidemic situation; The price of raw materials fluctuates.
