\u3000\u3 Shengda Resources Co.Ltd(000603) 833 Oppein Home Group Inc(603833) )
Event: the company issued the 2021 annual report. The revenue was 20.442 billion yuan, a year-on-year increase of + 38.68%; The net profit attributable to the parent company was 2.666 billion yuan, a year-on-year increase of + 29.23%; Deduct 2.51 billion yuan of non return to parent, a year-on-year increase of + 29.72%. Among them, Q4’s revenue was 6.040 billion yuan, a year-on-year increase of + 20.60%; The net profit attributable to the parent company was 552 million yuan, a year-on-year increase of – 9.84%; Deduct 497 million yuan of non return to parent, a year-on-year increase of – 9.38%.
The leading advantages are highlighted, and the retail bulk is launched simultaneously.
From the perspective of revenue channels, 1) the annual revenue of retail business was 16.267 billion yuan, a year-on-year increase of + 40.44%; Among them, Q4 revenue was 4.801 billion yuan, a year-on-year increase of + 21.72%. 2) The annual revenue of bulk business was 3.673 billion yuan, a year-on-year increase of + 36.94%; Among them, Q4 revenue was 1.038 billion yuan, a year-on-year increase of + 21.93%.
The company leads the industry in the number of outlets and dealer capacity, and has a solid advantage in the traditional distribution channels. With the help of its advantages, the company has achieved the growth of retail business: 1) the packaged business has entered the fast lane of development this year, with an annual order receiving performance of more than 2 billion yuan, an increase of more than 90%; 2) Continuously expand categories: the wardrobe business has formed scale and brand advantages and continued to grow, and the category boundary has expanded to software and electrical appliances; 3) Expand the brand matrix: positioning the young opelli brand, the revenue exceeded 1.4 billion yuan in 2021, with an increase of more than 65% at the same time. In addition, the high-end opelli brand continued to be cultivated. In terms of bulk business, the company controls risks through agent mode and strict customer screening; Expand business by deepening strategic customer cooperation, infiltrating the whole hardbound business, and developing national supporting projects. Therefore, under the premise of slowing down real estate sales and increasing collection pressure, the company’s bulk business achieved revenue growth and did not face the risk of credit impairment. We believe that the company has high multi category production efficiency, strong cost control and strong unified channel marketing ability, which helps the company always maintain a leading edge in channel reform and achieve healthy and better development than the industry.
The big home strategy is advancing rapidly, and the border expansion opens up space.
In terms of income categories, 1) the business income of wardrobe and supporting furniture and household products was 10.172 billion yuan, a year-on-year increase of + 49.53%. Furniture and household products and wardrobe were combined for the first time in 2021. 2) Cabinet business income was 7.529 billion yuan, a year-on-year increase of + 24.23%; Among them, Q4 revenue was 2.134 billion yuan, a year-on-year increase of + 10.50%. 3) The business income of bathroom and wooden door was 989 million yuan and 1236 million yuan, with a year-on-year increase of + 33.72% and + 60.36%, of which Q4 was + 24.47% and + 39.76% year-on-year.
In terms of wardrobe, 77 to 2201 stores were added, and the business was expanded simultaneously in multiple channels; It extends from cabinet customization to space customization, improves the product power with the environmental protection concept of space purification, promotes the rapid growth of wardrobe, and drives the rapid growth of other cabinets, wooden doors and furniture products. In terms of cabinets, the number of stores increased by 52 to 2459, and made efforts in the whole decoration channel to promote the integrated kitchen model, successfully grasp the opportunity of the retail end after the bulk slowdown, maintain the double-digit growth of cabinets and consolidate the champion position. In addition, wooden doors have benefited from multi-channel development to achieve high growth, and continue to improve brand strength through press conferences; Bathroom stores expanded 217 to 805 at a high speed, deeply promoted the whole bathroom customization mode, and completed the development of packaged and bulk channels. The CAXA home design software developed by the company realizes the integrated design and scene sales of the whole house space, and has been applied to more than 7000 stores in all categories and channels, helping the smooth promotion of the big home strategy at the marketing end. Based on the basic sector of cabinets, wardrobe and other categories, the company continues to drive the development of other categories, expand the category boundary and open the space for future development.
Excellent cost control ability to stabilize the net interest rate. The company’s gross profit margin in 2021 was 31.62%, with a year-on-year increase of -3.39pct, mainly due to the rise of raw material prices and changes in product structure. The prices of main raw materials have fallen or hit a high point this year, and the impact on the gross profit margin is generally controllable. The increase in the proportion of low gross profit category wooden doors and supporting products has reduced the overall gross profit margin. However, due to the supporting sales and low demand for cost investment, the change of product structure has little impact on the net profit margin. The company’s sales expense ratio / management expense ratio is -1.00pct / -0.98ct respectively, which has decreased and reached a new low in history. Facing the cost pressure, the company shows a strong ability of expense control. Overall, the net interest rate in 2021 was 13.04%, down 0.95pct year-on-year, still in the leading position in the industry. We believe that the company has strong cost control ability, significant scale advantage and strong profitability.
Profit forecast and investment rating: we are optimistic that the company will continue to make efforts in new channels such as assembly and bulk; Based on the superior category of cabinets and wardrobe, it continues to drive the rapid development of other categories and broaden the category boundary. Channel innovation and category expansion promote each other and promote the continuous growth of the company. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be RMB 3.136, 3.698 and 4.365 billion respectively, and the EPS will be RMB 5.15, 6.07 and 7.17 respectively. At present, the corresponding PE of the stock price is 22.85, 19.39 and 16.41 times respectively, maintaining the “recommended” rating.
Risk tip: the epidemic situation exceeded expectations, and the price rise of raw materials exceeded expectations.
