\u3000\u300 China Vanke Co.Ltd(000002) 6 Fiyta Precision Technology Co.Ltd(000026) )
Key investment points
Under the influence of the epidemic, the company's performance was slightly lower than our expectations. In 2022q1, the company realized an operating revenue of 1.174 billion yuan, a year-on-year increase of - 14.84%; The net profit attributable to the parent company was 86 million yuan, a year-on-year increase of - 26.96%; The net profit attributable to the parent company after deduction was 84 million yuan, a year-on-year increase of - 25.95%.
The precision technology business grew steadily, and the channel reform was steadily promoted. In terms of business, 1) in terms of private brand business, the company continues to expand marketing channels, and the development momentum of online e-commerce channels is good. In January 2022, the company launched the high-end product series "astronaut". The sales of high-end aerospace products are good. The company continues to launch Aerospace series marketing and practice the brand strategy of a big country; 2) In terms of watch retail service business, the epidemic control in 2022 has a great impact on offline channels. The company launched online intelligent sales system to alleviate the impact of the epidemic to a certain extent. According to the data of Swiss Watch Association in 2022, the amount of 2022m1-2 exported to China was 459 million Swiss francs, a year-on-year increase of + 2.6%. The sales data of 2022m1-2 imported Swiss watches of the company was basically the same, which was in line with the industry trend; 3) In terms of precision technology business, the company reserves more than 200 equipment, maintains double-digit growth in both revenue and profit, further adjusts the customer structure and increases the proportion of customers with high gross profit products.
Optimize the structure and improve the profitability of the company. In terms of profitability, the company's gross profit margin in 2022q1 increased from + 0.88pp to 45.09% year-on-year. We expect that the improvement of gross profit margin is mainly due to the company's increase in the proportion of high gross profit products; The net interest rate attributable to the parent company increased from -1.22pp to 7.36% year-on-year, mainly due to the loss on asset disposal and the increase of non operating expenses of the company. In terms of expense rate during the period, the year-on-year rate was + 2.22pp to 28.42%, of which the sales expense rate / management expense rate / R & D expense rate / financial expense rate was + 1.56pp / + 0.74pp / + 0.15pp / - 0.08pp to 21.93% / 5.83% / 1.11% / 0.66% respectively.
The cash flow situation is relatively stable and the operation efficiency is high. The ratio of net operating cash flow to net income from operating activities in 2022q1 was 14.80%, with a year-on-year increase of -4.89pp, and the cash flow was relatively stable. In terms of operation efficiency, due to factors such as poor logistics caused by the epidemic, the number of inventory turnover days increased by 50.89 days to 255.25 days year-on-year; The turnover days of accounts receivable decreased by 1.98 days to 29.03 days year-on-year.
Profit forecast and investment rating: China's famous watches continue to expand, and the development trend of the company's precision technology business is steadily improving. Considering the impact of the short-term epidemic on the company, we lowered the net profit attributable to the parent company from 2022 to 2024 to RMB 400 / 4.6 / 530 million (originally predicted to be RMB 450 / 5.2 / 590 million), corresponding to PE of 9 / 8 / 7X from 2022 to 2024, maintaining the "buy" rating.
Risk warning: the uncertainty of clock and watch consumption market is large; The return of overseas consumption is less than we expected, and the supply of famous watches is affected by the epidemic; The development of new retail channels is less than we expected; The new business is not as good as we expected.
