\u3000\u3 Guocheng Mining Co.Ltd(000688) 793 Shenzhen Breo Technology Co.Ltd(688793) )
Event:
The company released the 2021 annual report and the first quarterly report of 2022: in 21 years, the company achieved a revenue of 1.190 billion yuan, a year-on-year increase of + 43.93%; The net profit attributable to the parent company was 92 million yuan, a year-on-year increase of + 29.92%; The non net profit deducted was 77 million yuan, a year-on-year increase of + 22.23%; The operating cash flow was 87 million yuan, a year-on-year increase of 27.36%. Among them, 21q4 achieved a revenue of 376 million yuan, a year-on-year increase of + 23.77%; The net profit attributable to the parent company was 26 million yuan, a year-on-year increase of – 31.78%. 22q1 company achieved a revenue of 248 million yuan, a year-on-year increase of + 15.29%, and a net profit attributable to the parent company of – 10 million yuan.
Brief comment:
Offline direct businesses have been disturbed by the epidemic, and online e-commerce has maintained high growth. In the whole year of 21, the company’s offline stores were affected by the epidemic, the performance of offline sales revenue was poor, and the profitability gradually weakened. The gross profit margin in 2021 was 56.73%, year-on-year – 0.51%, of which 21q4 was – 4.58% year-on-year and 22q1 was – 2.78% year-on-year. Online, the company increased efforts to expand online channels and optimized the layout of e-commerce channels. In 2021, the annual online revenue reached 683 million yuan, a year-on-year increase of + 58.44%. 22q1 online revenue + 48.80% year-on-year. In the future, it is expected to realize online and offline integration and interaction, break through channel barriers, and gradually form a new retail model of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) dual integration.
Equity incentive shows long-term confidence. The company issued an equity incentive plan, which plans to grant 1.77 million restricted shares to 149 incentive objects, accounting for 2.87% of the total share capital, and the grant price is 27.40 yuan / share. The restricted shares granted are vested in three periods, and the performance evaluation goal is to meet the compound annual growth rate of revenue and performance from 2022 to 2024, and meet the growth of no less than 30%, 69% and 119.7% at the same time. At the same time, the company increases the individual performance appraisal requirements of incentive objects, and the appraisal is divided into five levels of attribution coefficient. The number of restricted shares actually attributed to incentive objects in the current year is directly linked to the attribution coefficient. Equity incentive plan is conducive to binding the interests of core employees and the company and promoting the stable development of the company.
Product categories continue to be enriched, and channel & marketing is constantly gaining momentum. The annual sales, management and R & D expenses in 21 years were 485 million yuan, 41 million yuan and 47 million yuan respectively, with a year-on-year increase of + 46%, + 43% and + 28%. The high sales expenses are mainly due to the large proportion of direct sales, the large promotion expenses of the company’s online platform, the rental expenses of offline stores and the salary expenses of salespeople. Product R & D: the company has increased its long-term investment in management and R & D, constantly pushing new and higher to avoid the risk of price reduction caused by product imitation by competitors. The growth rate of 22q1 revenue has decreased, and a large amount of cost investment is still invested in offline direct sales. The overall performance has suffered a loss. However, with the continuous optimization of online layout and product iteration, the performance is expected to improve in the future. Channels: pay attention to the construction of diversified channels, focus on the direct marketing mode, supplemented by the distribution system, and actively layout the online e-commerce platform. The online growth rate is fast, which is expected to continue to make efforts and feed back offline. Marketing: effective drainage of offline Direct stores, hiring top stars for endorsement, constantly injecting young vitality and maintaining high-end tone into the brand.
Investment advice
Shenzhen Breo Technology Co.Ltd(688793) deep ploughing massage track for more than 20 years, which is the first share of health intelligent hardware in China. Massage small electric circuit has strong growth attributes, the company has a stable market position, obvious advantages in products, channels, marketing and operation, and has good development potential in the future. We estimate that the net profit attributable to the parent company from 2022 to 2024 will be 103 million yuan, 188 million yuan and 272 million yuan, with a year-on-year increase of 12.1%, 82.1% and 45.2% respectively, corresponding to EPS of 1.67 yuan, 3.04 yuan and 4.42 yuan respectively, corresponding to PE of current market value of 26.40 times, 14.50 times and 9.99 times respectively, maintaining the “buy” rating.
Risk tips
Risk of recurrent outbreaks; Price fluctuation of raw materials; Online growth rate is lower than expected; The risk of intensified industry competition; Risks such as new product sales falling short of expectations.
