\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Matters:
Company announcement: on April 27, the company released the first quarterly report of 2022. The company's revenue was 4.12 billion yuan, a year-on-year increase of 11.4%; The net profit attributable to the parent company was 650 million yuan, a year-on-year increase of 12.4%.
Guoxin textile and clothing view: 1) the output was damaged under the influence of the epidemic at the beginning of the year, the performance in the first quarter increased by 12.4% year-on-year, and the employee attendance rate has recovered since March; 2) Maintain the prosperity of both production and marketing, try to recover the order gap in the follow-up, and the annual unit price increase is expected to be higher than that in the same period last year; 3) Risk warning: the epidemic situation seriously affects production and operation; The price of raw materials has risen sharply; Consumer demand in major markets fell sharply; 4) Investment suggestion: the company's production was affected by the epidemic at the beginning of the year, showing steady performance growth in the next quarter, highlighting the business toughness. Now, after the business recovery, the low performance has passed, the brand demand is still highly prosperous, the company's capacity development is smooth, and the product price has increased significantly. We are optimistic about the company's strong growth momentum in the future. According to the impact of the epidemic on the performance in the first quarter, based on careful consideration, we slightly reduced the profit forecast. It is estimated that the net profit of the company from 2022 to 2024 will be 3.53/45.5/5.59 billion yuan respectively (originally 3.65/46.6/5.75 billion yuan), with a year-on-year increase of 27.7% / 28.8% / 22.7%. Considering that there is still uncertainty about the impact of the future epidemic on the footwear and clothing manufacturing industry, the reasonable valuation was slightly reduced to 96.9-103.0 yuan (corresponding to 22pe32-34x, previously 34-35x), which is optimistic about the continuous improvement of the driving share of the company's core competitiveness and maintain the "buy" rating.
Comments:
Under the influence of the epidemic at the beginning of the year, the output was damaged, the performance in the first quarter increased by 12.4% year-on-year, and the employee attendance rate has recovered since March
The epidemic affected the attendance rate, and the growth of income and performance slowed down. In the first quarter of 2022, the company's revenue was 4.12 billion yuan, a year-on-year increase of 11.4%, excluding the impact of exchange rate, a year-on-year increase of 14.1%. The slowdown in revenue growth was mainly due to the impact of the epidemic on employee attendance. From the perspective of volume price splitting, the sales volume / unit price of sports shoes were 51.137 million pairs / 80.7 yuan respectively, with a year-on-year increase of 7.1% / 4.0% respectively. The revenue of the top five customers was 3.78 billion yuan, accounting for 91.7%. Excluding the impact of exchange rate, the total revenue increased by more than 17%. The net profit attributable to the parent company was 650 million yuan, a year-on-year increase of 12.4%; The net profit attributable to the parent company after deduction was 640 million yuan, with a year-on-year increase of 10.2%. If excluding the influence of exchange rate, it increased by 15.2% year-on-year.
Affected by the epidemic and raw materials, the gross profit margin decreased slightly, and the cost rate was basically the same. The gross profit margin of the company in the first quarter of 2022 was 25.7%, a year-on-year decrease of 2.7% and a month on month decrease of 1.2% compared with Q4. This was mainly due to the improvement of the efficiency of the new factory and the impact of the epidemic on the attendance rate at the beginning of this year, resulting in the temporary decline of production. In terms of expense rate, the sales / management / R & D expense rate was 0.5% / 3.7% / 1.5% respectively, which was basically the same year-on-year; The financial expense ratio was - 0.3%, a year-on-year decrease of 0.6 percentage points, mainly due to the increase of interest income and exchange income in the current period. The inventory amount was 3.05 billion yuan, a year-on-year increase of 14.4%.
Maintain the prosperity of both production and sales, try to recover the order gap in the follow-up, and the annual unit price increase is expected to be higher than that in the same period last year
The downstream demand is strong, the supply chain of the original major customers is tight, and new customers are expected to increase rapidly. In 2022, the revenue of the company's top five customers was 3.78 billion yuan, accounting for 91.7% of the company's sales. Excluding the impact of exchange rate, the revenue increased by about 17%. Global supply chain competition continues. Take Nike as an example. At present, its market demand in Europe and the United States is very strong, and the company will still face shortage in 2022. In addition, in terms of new customers, the orders of ASICs, on and NewBalance have been mass produced and shipped, and are expected to continue in large quantities.
In order to meet the strong demand of customers, the company actively expands production and improves production efficiency. In the medium term, the production capacity increases rapidly and has strong certainty. Vietnam Weilin, Vietnam Yongshan and Vietnam Hongxin (with a design capacity of 1 million pairs / month) established from 2019 to 2020 have been put into operation. It is expected that there is still room for capacity release in 2022. In addition, the company will also purchase existing plants in Vietnam and expand production lines in the company's original plants to help improve the production capacity of the original plants. Based on the strong demand of customers' expected orders, the company will continue to invest in new factories in northern Vietnam. Considering the requirements of decentralized allocation of manufacturing capacity, the company also began to invest in the construction of large manufacturing bases in Indonesia. In terms of production efficiency, the company promotes management standardization, informatization and digitization to improve efficiency and improve the delivery capacity and operation level of mass production plants. Specifically, through the wide popularization of automatic equipment such as computer needle car, cold adhesive shoe hydraulic press, automatic shoe folding box machine and automatic screen printing, as well as the promotion and wide use of self-developed and self created auxiliary clamping tools such as "computer car tongue connecting process", "automatic folding innovative splint", "computer needle car non-stop circular sewing", "rubber brushing support" and "auxiliary fixture for shoelace", the company improves the stability of product quality and production efficiency, Improve employees' work comfort.
The epidemic loss is relatively minor and is expected to be recovered gradually. In February 2022, the epidemic situation in northern Vietnam was relatively severe, affecting the attendance of employees. It has recovered in early March. In the first quarter of 2022, the output of sports shoes of the company was 51.14 million pairs, with a month on month decline in the number of units. The lost production capacity is expected to be recovered in the next few months. The annual unit price increase is expected to accelerate over last year. In terms of unit price, the unit price of US dollars sold by the company increased by 4.5% year-on-year in 2021 and 6.8% year-on-year in the first quarter of 2022. The growth rate has been accelerated. The price increase in the whole year is expected to be higher than that of last year due to the improvement of high-value product portfolio and product price increase.
Investment suggestion: the low performance has passed, the growth momentum is strong, and the "buy" rating is maintained
Under the influence of the epidemic, the company showed steady performance growth in the next quarter. Now the performance low point has passed after the business recovery, the brand demand is still highly prosperous, the company's production capacity is developed smoothly, the product price is increased significantly, and the growth momentum in the future is strong. According to the impact of the epidemic on the performance in the first quarter, based on careful consideration, we slightly reduced the profit forecast. It is estimated that the net profit of the company from 2022 to 2024 will be 3.53/45.5/5.59 billion yuan respectively (originally 3.65/46.6/5.75 billion yuan), with a year-on-year increase of 27.7% / 28.8% / 22.7%. Considering that there is still uncertainty about the impact of the future epidemic on the footwear and clothing manufacturing industry, the reasonable valuation was slightly reduced to 96.9-103.0 yuan (corresponding to 22pe32-34x, previously 34-35x), which is optimistic about the continuous improvement of the driving share of the company's core competitiveness and maintain the "buy" rating.
