\u3000\u3 Shengda Resources Co.Ltd(000603) 558 Zhejiang Jasan Holding Group Co.Ltd(603558) )
Event overview
In 2021, the company's revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were RMB 2.052/1.67/153 billion respectively, with a year-on-year increase of 30% / 132% / 128%. The performance was in line with the notice, and the net profit was RMB 213 million after excluding one-time factors (equity incentive expense of RMB 36.53 million and goodwill impairment loss of RMB 9.13 million). The operating cash flow / net profit was 162%, and the higher operating cash flow than net profit was mainly due to the depreciation of 132 million yuan and the increase of 300 million yuan in payable items. 21q4's revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were RMB 530 / - 0.14 / - 19 million respectively, with a year-on-year increase of 23% / 98% / 97%, and the revenue slowed down month on month; Q4 loss was mainly due to the increase of management expense ratio and the increase of asset impairment provision. 22q1's revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were 532 / 82 / 66 million yuan respectively, with a year-on-year increase of 29% / 74% / 41%, and the performance slightly exceeded expectations. The dividend per share is 0.15 yuan.
Analysis and judgment:
The growth of cotton socks exceeded expectations, and the seamless production capacity began to return to full production in September. Split: 1) the revenue of cotton socks was 1.503 billion yuan, with a year-on-year increase of 42%, of which the sales volume was 383 million pairs, an increase of 34%, and the launch price increased by 6%; According to our analysis, the increase in sales volume mainly comes from the expansion of production (the production capacity increases by 34%, of which China / Vietnam increases by 30% / 33%), and the capacity utilization rate is close to full production. 2) The seamless revenue was 502 million yuan, with a year-on-year increase of 5%, of which the sales volume was 21.37 million pieces, an increase of 23% and the launch price decreased by 15%. We analyzed that the capacity utilization was mainly affected by the epidemic in Vietnam in the first half of the year, but full production was restored in September; We estimate that the company's seamless capacity increases by 30%, but the capacity utilization rate is low (Qiao Er Tingting / Guizhou Dingsheng is 74.1% / 78.61%). For seamless, the company actively takes measures to adjust: 1) expand customers to reduce the risk of order concentration. New customers include Li Ning, HM, tefron, ikar and ubras; 2) The production capacity layout was optimized by putting into operation at different levels, and Guizhou Dingsheng seamless knitting machines increased from 173 to 309.
The increase of gross profit margin mainly comes from the contribution of price increase of cotton socks. In 2021, the gross profit margin was 26.76%, with a year-on-year increase of 6.66pct. The increase in gross profit margin was mainly due to the increase in the price of cotton socks (the gross profit margin of leisure / sports cotton socks increased by 4 / 9pct). The decline in seamless gross profit margin was mainly affected by capacity utilization (the gross profit margin of seamless leisure / sports decreased by 1.7 / 2.9pct); The net interest rate was 8.14%, a year-on-year increase of 41.51pct, mainly due to the provision for goodwill impairment in 20 years. In terms of expense ratio, in 2021, the sales / management / R & D / financial expense ratio was 2.91% / 12.43% / 2.87% / 0.98% respectively, with a year-on-year decrease of 0.24/0.26/0.64/0.04pct, and the management expense increased by 27% year-on-year, mainly due to the increase of employee compensation caused by the dividend expense of about 36.52 million in the second phase of the company's employee stock ownership plan, the increase of management personnel and salary adjustment. The net investment income / income was 0.20%, with a year-on-year increase of 0.01pct. The net interest rate of 22q1 was 15.51%, an increase of 4.06pct year-on-year.
The amount of inventory increased and the turnover days of accounts receivable decreased. The company's inventory at the end of the year was 665 million yuan, an increase of 54% over the beginning of the period, mainly due to the increase in the price of raw materials in 2021, the increase in the company's stock and the covid-19 epidemic, which led to the extension of the company's finished product shipment; Accounts receivable amounted to 438 million yuan, a year-on-year increase of 39%. The company's inventory turnover days were 131 days, with a year-on-year increase of 5 days; The turnover days of accounts receivable were 66 days, a year-on-year decrease of 5 days, mainly due to the extended credit period of some customers during the recovery of the epidemic.
Investment advice
We judge that (1) cotton socks continue to expand production: Guizhou plans to expand production by 1000 units, the first phase of 440 units has been put into operation in 21q3, and the production capacity is expected to be released in 2022; (2) In the past 22 years, seamless ushered in the normalization of development, the recovery of capacity utilization and the contribution of profit elasticity. Considering the higher than expected growth of cotton socks, the income in 2022 / 2023 will be increased from 2.545/2.944 billion yuan to 2.604/2.963 billion yuan, the new 24-year income will be 3.338 billion yuan, the net profit attributable to the mother in 2022 / 2023 will be increased from 323 / 408 million yuan to 333 / 412 million yuan, the new 24-year net profit attributable to the mother will be 483 million yuan, the EPS in 2022 / 2023 will be increased from 0.82/1.04 yuan to 0.85/1.05 yuan, and the EPS in 2024 will be 1.23 yuan, On April 25, 2022, the closing price was 12.11 yuan, corresponding to the PE of 22 / 23 / 24 years, which were 14 / 12 / 10x respectively, maintaining the "buy" rating.
Risk tips
Uncertainty of epidemic development, exchange rate fluctuation risk, cotton price fluctuation risk, major shareholder reduction risk and systemic risk.
