\u3000\u3 Shengda Resources Co.Ltd(000603) 365 Shanghai Shuixing Home Textile Co.Ltd(603365) )
Event overview
In 2021, the revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 37.99/386362 million respectively, with a year-on-year increase of 25% / 41% / 57% and a year-on-year increase of 27% / 22% / 29% compared with 19 years. The performance exceeded expectations mainly due to the significant increase in the franchise gross profit margin, and the non economic benefits were mainly government subsidies of RMB 23 million. 21q4 revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were 13.43/136132 million yuan respectively, with a year-on-year increase of 20% / 34% / 30%, 37% / 36% / 38% higher than 19q4. The acceleration of revenue growth compared with 21q3 mainly came from online. Cash dividend of 0.5 yuan per share and dividend yield of 3.3%.
22q1 revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were 806 / 0.85/0.67 billion yuan respectively, with a year-on-year increase of 12% / 7% / – 6%. The decline in non deduction was mainly due to the increase of sales expense rate, the increase of credit impairment and the decrease of non operating income.
Analysis and judgment:
Online high growth slowed to single digit growth in the second half of the year. In 2021, the direct / franchise / online / other revenue was RMB 279 million / 14.84 million / 19.65 million / 64 million respectively, with a year-on-year increase of 32% / 20% / 30% / 1%, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) both increased faster than that in 20 years (offline / online increased by – 14% / 24% respectively in 20 years), and the online growth rate was higher than that in the same industry. In the first and second half of the year, the growth rate in the second half of the year was slower than that in the first half of the year. The online / offline growth rate in the second half of the year was 21% / 6% respectively (the online / offline growth rate in the first half of the year was 46% / 32% respectively).
The gross profit margin of franchise increased significantly. In 2021, the gross profit margin was 37.95%, with a year-on-year increase of 2.64pct and 0.36pct compared with 19 years. Among them, the gross profit margin of e-commerce / franchise / direct sales / other was 36.18% / 37.09% / 57.72% / 29.63% respectively, with a year-on-year increase of 0.08/6.26 / – 0.43/1.9pct. The franchise gross profit margin increased significantly. Our analysis is mainly due to the company’s more support policies for franchisees in 2020 and the optimization and improvement of product structure in 2021. The gross profit margin of 21q4 was 36.73%, with a year-on-year increase of 1.77pct. 22q1 gross profit margin was 38.14%, with a year-on-year increase of 0.95pct.
The increase of net profit margin in 21 years was due to the contribution of gross profit margin. The decrease of net profit margin in 22q1 was affected by the increase of sales expense rate, the increase of impairment and the decrease of non operating income. In 2021, the net profit attributable to the parent company was 10.16%, with a year-on-year increase of 1.11pct and a decrease of 0.35pct compared with 19 years. The year-on-year increase was mainly due to the increase of gross profit margin. In terms of expense rate, the sales / management / R & D / financial expense rate in 2021 was 19.85% / 4% / 1.72% / – 0.29% respectively, with a year-on-year increase of 1.12 / – 0.75 / – 0.39/0.11pct. The increase of sales expense rate was mainly due to the increase of advertising expenses and personnel salary expenses, and the decrease of management expense rate was mainly due to the decrease of salary / income. Asset impairment loss / revenue -0.17pct to 0.42%. The income tax rate was 18.9%, with a year-on-year increase of 2pct. The net profit margin of 21q4 was 10.11%, with a year-on-year increase of 1PCT, mainly due to the increase of gross profit margin. 22q1 net interest rate was 10.5%, with a year-on-year decrease of 0.5pct, mainly due to the increase of sales expense rate, the increase of credit impairment loss and the decrease of non operating income.
Inventory 22q1 continued to grow month on month, and attention was paid to the de inventory. In 2021, the amount of accounts receivable / inventory / accounts payable was 217 / 931 / 293 million yuan respectively, with a year-on-year increase of – 24.28% / 26.95% / – 21.83%. The turnover days of accounts receivable / inventory / accounts payable were 24 / 127 / 51 days respectively, with a year-on-year decrease of 4 / 17 / 8 days. The inventory increased significantly. According to our analysis, on the one hand, due to the increase of stock, on the other hand, due to the impact of warm winter, from the perspective of inventory structure, the proportion of raw materials / products in process / finished products was 12% / 7% / 79% respectively. 22q1 accounts receivable / inventory / accounts payable amounted to 186 / 946 / 269 million yuan respectively, with a year-on-year increase of – 2.81% / 8.53% / – 5.36%. The turnover days of accounts receivable / inventory / accounts payable were 23 / 169 / 51 days respectively, with a year-on-year decrease of 7 / – 9 / 15 days.
Investment advice
In the short term, we analyze the impact of the epidemic in mid and late March on franchisees’ delivery. With the improvement of the epidemic, franchisees’ contribution to replenishment is expected to accelerate.
Medium and long term concerns: (1) at present, the company has a high proportion in county-level cities, but there is still room for expansion in opening direct stores in the first and second tier. In the future, the proportion of direct sales, the optimization of product structure and the proportion of high gross profit products are expected to drive the improvement of overall profitability; (2) The company has horizontally expanded various categories, mainly focused on scene development, added curtains and fabric soft accessories, and improved the joint rate.
Considering the impact of the epidemic in 22 years, the income in 22 / 23 years was adjusted from 4.193/4.669 billion yuan to 4.18/4.766 billion yuan, and the new 24-year income was 5.352 billion yuan. Considering that the net profit in 21 years exceeded the expectation, the net profit attributable to the mother in 23 / 24 years was adjusted from 416 / 465 million yuan to 4.3/492 million yuan, the new 24-year net profit attributable to the mother was 555 million yuan, and the EPS in 22 / 23 years was adjusted from 1.56/1.75 yuan to 1.61/1.84 yuan, and the new 24-year EPS was 208 yuan, On April 25, 2022, the closing price was 15.04 yuan, and the corresponding PE was 9 / 8 / 7X respectively, maintaining the “buy” rating.
Risk tips
The uncertainty of epidemic development, the risk of inventory backlog, the opening of stores less than expected, and systemic risk.
