\u3000\u3 Bohai Water Industry Co.Ltd(000605) 299 Shuhua Sports Co.Ltd(605299) )
Event: Shuhua Sports Co.Ltd(605299) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 1.562 billion yuan, a year-on-year increase of 5.25%; The net profit attributable to the parent company was 116 million yuan, a year-on-year decrease of 15.45%; The net profit attributable to the parent company after deduction was 102 million yuan, a year-on-year decrease of 21.52%. In 2021q4, the company realized an operating revenue of 473 million yuan, a year-on-year decrease of 8.28%; The net profit attributable to the parent company was 38 million yuan, a year-on-year decrease of 39.58%; The net profit attributable to the parent company after deduction was 35 million yuan, a year-on-year decrease of 40.34%. In addition, in the first quarter of 2022, the company achieved an operating revenue of 278 million yuan, a year-on-year decrease of 13.74%; The net profit attributable to the parent company was 13 million yuan, a year-on-year increase of 4.30%; The net profit attributable to the parent company after deduction was 11 million yuan, a year-on-year decrease of 12.17%.
Multi dimensional motion scene overweight layout, intelligent upgrading, enabling product power
In terms of products, in 2021, the company achieved revenue of 971 / 309 / 242 million yuan from indoor fitness equipment, display supplies and outdoor fitness paths, with a year-on-year increase of 0.85% / 35.94% / - 9.10%. The company actively promotes the upgrading of system solutions for various sports scenes and seizes the development opportunity of national fitness. 1) In the field of national fitness indoor, the company contracted to build more than 600 people's gyms from 2020 to 2021. 2) In the field of sports parks, the company undertook to build the sports park on the right bank of Shaanxi Bahe, the "double first" observation point of the National Games, which provided a diversified temsector for the promotion of follow-up sports parks. 3) In the field of competitive sports, as the official fitness equipment supplier of Beijing 2022 Winter Olympic Games and winter Paralympic Games, the company scientifically configures fitness equipment for the Three Winter Olympic Village fitness centers to further improve the brand influence.
At the same time, the company actively promotes the intelligent process of products. At present, Shuhua sports app has core functions such as course, live broadcast, training plan and community, which deeply matches the fitness needs of users. In May 2021, the company and Huawei jointly released the "Jizhi 2nd generation luxury commercial treadmill" equipped with Hongmeng operating system at the sports Expo to achieve a key breakthrough in the interconnection of things in the field of sports and health. On this basis, subsequent companies will promote product iteration and innovation.
Offline channels expanded steadily and e-commerce channels performed well
In terms of channels, in 2021, the company's direct sales, distribution and export channels achieved revenue of 884 / 464 / 214 million yuan respectively, with a year-on-year increase of 10.57% / 13.45% / - 22.31%. The company has carried out channel expansion with the market strategy of "TOC + tob + tog". 1) in terms of distribution channels, by the end of 2021, the company had more than 230 dealers, covering markets at all levels in the form of exclusive stores, stores in shopping centers and other forms. 2) In terms of e-commerce channels, the company has opened direct flagship stores on tmall, jd.com, vipshop and other platforms, and has added an online sales model of Tiktok to sell indoor fitness products. In 2021, Shuhua ranked first in the sales volume of JD's medium and high-end treadmills with more than 3000 yuan, and the sales volume of sports bicycles, elliptical machines and other vehicle products on JD's platform increased by 78% year-on-year. In the ranking of tmall's large-scale fitness equipment, the sales volume of Shuhua brand ranks in the forefront, and the sales volume of fitness bike increased by 39% year-on-year. 3) In terms of government procurement business, the company mainly sells outdoor path products and some indoor fitness equipment products to customers such as sports bureaus, government departments, enterprises and institutions. Benefiting from the national fitness trend, tog business is expected to advance steadily with the bidding procurement process.
The rise of raw materials suppresses the profit space, and the cost control in 21 years is relatively good
In 21 years, the company's comprehensive gross profit margin was 28.20%, down 2.20 PCT year-on-year, mainly due to the rise in the price of raw materials. 22q1 company's comprehensive gross profit margin was 29.04%, with a year-on-year increase of 3.00pct. In terms of period expenses, the company's period expense rate in 21 years was 17.36%, with a slight year-on-year increase of 0.20pct, and the sales / management / R & D / financial expense rate was 8.19% / 6.74% / 2.22% / 0.21% respectively, with a year-on-year increase of + 0.87 / + 0.04 / + 0.001 / - 0.71pct respectively. The decrease in the financial expense rate was mainly due to the company's early repayment of loans and reduction of loan scale. The increase in the sales expense rate was mainly due to the company's increase in relevant expenses to cooperate with the growth of sales business. The expense rate of 22q1 company during the period was 21.82%, with a year-on-year increase of 3.66pct. Under the comprehensive influence, the net interest rate of the company in 21 years was 7.41%, down 1.82pct year-on-year; The net interest rate of 22q1 company was 4.78%, with a year-on-year increase of 0.83pct.
Investment suggestion: the company will accelerate the expansion of TOC + tob + tog channel layout and provide the whole fitness venue
The company's market share is expected to be further improved under the background of the continuous implementation of China's fitness policy. We expect the operating revenue of Shuhua Sports Co.Ltd(605299) 20222024 to be RMB 1.932 billion, 2.278 billion and 2.681 billion, with a year-on-year increase of 23.69%, 17.91% and 17.69%; The net profit attributable to the parent company was 165, 197 and 241 million yuan, with a year-on-year increase of 42.70%, 19.04% and 22.63%, and the corresponding PE was 23.0x, 19.3x and 15.8x. Considering the repeated epidemic situation and the uncertainty of the impact of raw material price fluctuations, the investment rating of overweight-a was given.
Risk warning: the risk of relatively concentrated customers of display shelf products; Raw material price fluctuation risk; Exchange rate fluctuation risk.
