\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 009 Hangzhou Coco Healthcare Products Co.Ltd(301009) )
Event: Hangzhou Coco Healthcare Products Co.Ltd(301009) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 1.186 billion yuan, a year-on-year decrease of 27.44%; The net profit attributable to the parent company was 40 million yuan, a year-on-year decrease of 81.43%; The net profit attributable to the parent company after deducting non-profit was 33 million yuan, a year-on-year decrease of 83.42%. In 2021q4, the company realized an operating revenue of 320 million yuan, a year-on-year decrease of 20.44%; The net profit attributable to the parent company was -30 million yuan, a year-on-year decrease of 164.63%; The net profit attributable to the parent company after deduction of non-profit was -34 million yuan, a year-on-year decrease of 183.52%.
In addition, in 2022q1, the company achieved an operating revenue of 322 million yuan, a year-on-year decrease of 3.34%; The net profit attributable to the parent company was 02 million yuan, a year-on-year decrease of 95.14%; The net profit attributable to the parent company after deducting non-profit was RMB 01 million, a year-on-year decrease of 96.31%.
The income of infant care business is affected by demand, and the product structure is continuously upgraded and optimized
In 2021, the company's performance was under pressure. After excluding the income from epidemic prevention materials, the annual income growth rate decreased by 19.01% year-on-year, mainly due to the sluggish demand in the baby care market. By category, in 2021, infant care products, adult care products (adult incontinence + female care), pet care products, masks and others achieved revenue of RMB 612 / 464 / 0.88/0.23 million respectively, with a year-on-year increase of - 34.81% / 8.07% / 13.86% / - 88.09%, accounting for 51.60% / 39.09% / 7.40% / 1.90% respectively. The birth rate continues to decline, reducing the demand for baby hygiene products; The aging degree is increasing, and the adult incontinence products market is growing rapidly; The demand for women's health continues to grow.
In terms of sales mode, the company's independent brand and ODM mode achieved revenue of RMB 391 million / 778 million respectively in 2021, with a year-on-year decrease of 12.05% / 33.81%, accounting for 32.96% / 65.57% respectively. Its own brand is mainly adult series, and ODM is mainly baby and pet series. The company focuses on improving the value of its own brand, increases brand investment, starts brand upgrading planning with Shanghai huahehua Marketing Consulting Co., Ltd., and makes every effort to create the concept of "dynamic elderly" and lead to a new experience of enjoying the old and happy life. The company continues to optimize product performance and experience, and focuses on medium and high-end R & D to optimize product structure. It has formed a product matrix with rich brands and excellent structure in its own brands, such as the introduction of mild incontinence products for Asian women, invisible absorbent towels and invisible travel pants, as well as professional men's absorbent towels.
In 2022q1, the profitability rebounded month on month, and the sales expenses and management expenses increased
In terms of profitability, the company's comprehensive gross profit margin in 2021 was 18.64%, down 9.19pct year-on-year. Among them, the gross profit margin of domestic trade of the company was 21.48%, a year-on-year decrease of 2.46 PCT; The gross profit margin of foreign trade was 15.68%, down 16.14 PCT year-on-year. 2021q4 company's comprehensive gross profit margin was 7.56%, down 16.41pct year-on-year; The company's comprehensive gross profit margin in 2022q1 was 12.07%, down 13.30pct year-on-year. The rise in raw material costs and transportation costs still affected the company's gross profit margin, but the gross profit margin rose 4.51pct month on month compared with 2021q4. Under the comprehensive influence, the net interest rate of the company in 2021 was 3.35%, down 9.74pct year-on-year; The net profit margin of 2022q1 was 0.61%, down 11.49pct year-on-year. In terms of period expenses, the expense rate in 2021 was 14.40%, with a year-on-year increase of 3.90pct, and the expense rates of sales / management / R & D / finance were 7.64% / 3.13% / 4.15% / - 0.53% respectively, with a year-on-year increase of + 3.64 / + 1.61 / + 0.55 / - 1.90pct respectively. Among them, the increase in sales expenses is mainly due to the increase in marketing expenses and human resources costs; The increase in administrative expenses was mainly due to the cancellation of tax and social security benefits.
Investment suggestion: under the aging trend, the market penetration of adult incontinence products in China is still increasing year by year. As a leading enterprise of adult incontinence products in China, the company is driven by "independent brand + ODM". While continuously building the competitiveness of independent brand, the company continues to optimize the product structure, and its performance is expected to be gradually repaired. We expect the operating revenue of Hangzhou Coco Healthcare Products Co.Ltd(301009) 20222024 to be 1.395 billion yuan, 1.623 billion yuan and 1.859 billion yuan respectively, with a year-on-year increase of 17.58%, 16.34% and 14.54%; The net profit attributable to the parent company was 78 million yuan, 154 million yuan and 221 million yuan respectively, with a year-on-year increase of 96.25%, 97.44% and 43.51%, and the corresponding PE was 42.5x, 21.5x and 15.0x respectively. Considering the short-term pressure on the performance and the temporary uncertainty of the impact of the epidemic, the investment rating of overweight-a was maintained.
Risk tip: the risk of sharp rise in the price of raw materials, the risk of lower than expected downstream demand, and the risk of intensified industry competition.
