\u3000\u3 Shengda Resources Co.Ltd(000603) 868 Shanghai Flyco Electrical Appliance Co.Ltd(603868) )
Event: in 2021, the company achieved an operating revenue of 4.005 billion yuan, a year-on-year increase of + 12.26%, and a net profit attributable to the parent company of 641 million yuan, a year-on-year increase of + 0.38%; Among them, 2021q4 achieved an operating revenue of 1.142 billion yuan, a year-on-year increase of + 7.42%, and a net profit attributable to the parent company of 138 million yuan, a year-on-year increase of - 17.57%. In Q1 of 2022, the company achieved an operating revenue of 1.12 billion yuan, a year-on-year increase of + 27.54%, and a net profit attributable to the parent company of 237 million yuan, a year-on-year increase of + 59.1%. 22q1 performance significantly exceeded expectations.
Category upgrading drives the growth of razors, and the proportion of emerging channels continues to increase. From the perspective of sub business: in 2021, the company achieved a revenue of 2.783 billion yuan from razor business, a year-on-year increase of + 20.9%, 518 million yuan from hair dryer, a year-on-year increase of - 9.5%, and 58 million yuan from electric toothbrush, a year-on-year increase of + 2254.7%; Among them, 21h2 razor was 1.581 billion yuan, a year-on-year increase of + 14.3%, hair dryer 293 million yuan, a year-on-year increase of - 19.7%, and electric toothbrush 35 million yuan, a month on month increase of + 52.1%. In the past 21 years, the company's new sales of medium and high-end razors accounted for 20.32%, and the average sales price of razor products increased by 25.23% compared with 2020. In terms of electric toothbrushes, the volume of electric toothbrushes has continued in 21 years, with a high growth in 21h2 compared with H1. From the perspective of channels: the company has continuously deepened the "C-end" reform online, continued to improve self operated e-commerce, driven the upgrading of product structure, and strengthened the construction of emerging channels. According to the cicada mother data, we expect that the sales of 21q4 Tiktok channels account for about 9% of the overall revenue; Offline channels continue to promote the "direct supply" of Ka stores and the "refinement" of regional distribution. Ka channels streamline costs and strengthen the penetration of distribution channels.
From Q1, the company continued to promote category upgrading, strengthen the construction of emerging channels, and the revenue growth was bright. High end innovative razor products continue to be recognized by consumers. According to the business consultant data, the transaction amount of 22q1 Feike razor is + 32% year-on-year; The construction of emerging channels is progressing smoothly. According to the data of cicada mother, we expect that the sales of Q1 Tiktok platform accounts for about 16% of the overall revenue, achieving a rapid increase month on month.
The high-end category improves the gross profit level, increases the promotion investment, and the sales expense rate is high
In 2021, the gross profit margin of the company was 47.03%, year-on-year + 5.79pct, and the net profit margin was 15.94%, year-on-year -1.91pct; The gross profit margin of 2021q4 was 46.73%, year-on-year + 9.48pct, and the net profit margin was 11.96%, year-on-year -3.7pct. In 2022, the company's Q1 gross profit margin was 54.07%, year-on-year + 9.91pct, and the net profit margin was 21.12%, year-on-year + 4.22pct. In 2021, the company's sales, management, R & D and financial expense rates were 19.22%, 4.02%, 3.29% and - 0.09% respectively, with a year-on-year increase of + 7.44, + 0.24, + 1.22 and 0pct; In the quarter of 21q4, the rates of sales, management, R & D and financial expenses were 20.18%, 5.83%, 3.97% and 0.01% respectively, with a year-on-year increase of + 10.8, + 1.79, + 1.92 and + 0.11pct. The company's Q1 sales, management, R & D and financial expense rates in 2022 were 21.15%, 3.18%, 2.01% and - 0.1% respectively, with a year-on-year increase of + 5.16, -0.54, + 0.04 and + 0.02pct.
In the environment of high cost pressure in 21 years, the high-end category has promoted the high increase of the company's profit level. In terms of expenses: the increased investment in promotion of emerging channels and self operated e-commerce has led to the continuous upward rate of sales expenses, and the increased investment in product innovation has led to the increase of R & D expenses. In terms of gross sales difference: over the past 21 years, the company has continued to increase investment in marketing promotion, and the gross sales difference in 21q4 has decreased month on month compared with the beginning of the year. Since 22q1, the proportion of high-end category sales has continued to increase, and the gross sales difference has increased by 6.4% month on month compared with 21q4, and the profitability of the company has improved significantly.
Investment suggestion: looking forward to the future, the high-end products and the construction of emerging channels will promote the growth of the company at both ends of revenue and performance. In terms of revenue, the price segment of high-end products rises, and the promotion investment in emerging channels is expected to make the company's products reach more consumer target groups. At the same time, the products in the original price segment continue to maintain growth vitality through the penetration of distribution channels. In terms of performance, in the long run, the scale effect brought by the continuous improvement of category upgrading is expected to offset the negative impact of increased promotion investment on profits, and the continuous growth of revenue performance can be expected in the future. Based on the performance of razors in the company's first quarterly report, we raised the average price and gross profit margin of razors. It is estimated that the net profit in 22-24 years will be 910 million yuan, 1.16 billion yuan and 1.38 billion yuan (the value was 780 million yuan and 870 million yuan before 22-23 years), corresponding to pe2.3 billion yuan 8x, 18.6x, 15.6x, maintaining the "buy" rating.
Risk warning: the upgrading of product structure is not as expected; The progress of channel reform is less than expected; Raw material price fluctuation risk
