\u3000\u3 Shengda Resources Co.Ltd(000603) 195 Gongniu Group Co.Ltd(603195) )
Event: the company achieved a total operating revenue of 3.08 billion yuan in 22q1, a year-on-year increase of + 19.6%; The net profit attributable to the parent company was 640 million yuan, a year-on-year increase of + 5.7%; Deduct the net profit not attributable to the parent company of 560 million yuan, a year-on-year increase of + 0.7%.
Revenue met expectations, and the decline in profitability narrowed month on month. 22q1 company achieved a revenue of 3.08 billion yuan, a year-on-year increase of + 19.6%. We expect that the growth of each sector will basically continue the growth trend in 2021 (LED lighting wall socket electrical connection business). Considering that the epidemic situation distributed in various regions in the first quarter has a great impact on bull offline stores, the actual operation growth rate of the company should be slightly higher than expected. The overall gross profit margin of 22q1 company was 34.5%, with a year-on-year increase of – 3.3pct, or due to the significant year-on-year increase in the cost of raw materials, but the decline in gross profit margin has narrowed compared with the previous quarter (21q4 gross profit margin was 32.3%, with a year-on-year increase of – 9.3pct), and the overall profitability of the company has gradually stabilized. On the expense side, 22q1 company has increased its expense investment, of which the sales / management / R & D / financial expense ratio is 5.2% / 3.9% / 3.6% / – 0.9% respectively, with a year-on-year increase of + 0.6 / + 0.4 / + 0.6 / – 0.3pct. We believe that in the past 22 years, the company has comprehensively upgraded its brand strategy, laid out multiple potential tracks and tapped the second growth curve, which has brought about the improvement of marketing and R & D investment, which is expected to enable long-term development. In addition, the company received a government subsidy of 34.53 million yuan in 22q1, an increase of 33.46 million yuan compared with 21q1, contributing to the current performance growth rate of 5.5% and increasing the net interest rate by 1.3pct. Under the comprehensive influence, the company’s 22q1 net profit margin attributable to the parent company increased from – 2.7pct to 20.8% year-on-year.
Further abundant cash flow, enabling new products to broaden and optimize channels. According to the cash flow statement, the net operating cash flow of 22q1 company was 430 million yuan, a year-on-year increase of + 21.8%, and the cash received from selling goods and providing labor services was 3.81 billion yuan, a year-on-year increase of + 22.7%, which was basically consistent with the growth rate of revenue in the current period. From the balance sheet, the company’s monetary capital + trading financial assets at the end of the first quarter was 11.5 billion yuan, which was + 11.6% higher than that at the end of the 21st century. The available funds are further abundant, which is expected to continue to enable the expansion of new categories, optimize channels and increase corresponding marketing investment; Notes receivable and accounts receivable totaled 260 million yuan, up + 17.3% from the end of 21; The inventory was 1.23 billion yuan, down – 10.3% from the end of 21. In terms of turnover days, the company’s 22q1 inventory / accounts receivable / accounts payable turnover days were 58.3 / 7.0 / 70.1 days respectively, with a year-on-year increase of + 8.4 / + 1.1 / + 1.3 days.
The basic sector business has grown steadily, and the layout of tuyeres and potential tracks escort the long-term development. On the one hand, the channel barrier of the company’s core main business converter is solid, and the leading position is stable. In line with the upsurge of new infrastructure and new energy, the company develops industrial power distribution and charging gun / pile of new energy vehicles to broaden the power consumption scene; Continue to deepen the wall socket business, continue to expand the leading edge of the industry, and establish an intelligent commercial lighting team to drive the lighting business to the b-end development; Accelerate the launch of new digital accessories and promote the change of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) traffic. On the other hand, the company has clearly put forward the medium and long-term key layout direction: 1) the whole house intelligent ecology with no main lamp as the core; 2) New energy business represented by new energy vehicle charging equipment; 3) Digital fast charging products, portable energy storage products, etc. In addition, the company has further expanded the coverage of the incentive plan in the past 22 years, which helps to stimulate the enthusiasm of the core team and drive the business talents and technical backbone to jointly promote the realization of strategic objectives.
Investment suggestion: as an electrician leader, the company has a clear logic for long-term development – consolidate the leading position of wall socket and converter business in advantageous categories, continue to enable the growth of LED lighting and digital accessories business, incubate emerging businesses such as charging gun / pile and outdoor power supply, and open a broader power consumption scene. We continue to be optimistic about the leading position of bull in the field of civil electrician and the growth of the new track. We estimate that the company’s net profit for 22-24 years is RMB 3.149/36.85/4.235 billion (before maintenance), and the corresponding valuation is 24.2x/20.7x/18.0x, maintaining the “buy” rating.
Risk warning: the risk that the development of new business does not meet expectations; The risk that the development of new channels fails to meet the expectations; The risk that the price of raw materials will continue to rise; The risk of fluctuations in the real estate market; The risk of intensified market competition.
