\u3000\u3 Shengda Resources Co.Ltd(000603) 992 Xiamen Solex High-Tech Industries Co.Ltd(603992) )
Event: Xiamen Solex High-Tech Industries Co.Ltd(603992) released the 2021 annual report and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 2.977 billion yuan, a year-on-year increase of 46.30%; The net profit attributable to the parent company was 1.101 billion yuan, a year-on-year increase of 1.93%; The net profit attributable to the parent company after deduction was 253 million yuan, a year-on-year increase of 13.08%. In 2021q4, the company realized an operating revenue of 980 million yuan, a year-on-year increase of 49.03%; The net profit attributable to the parent company was 92 million yuan, a year-on-year increase of 17.34%; The net profit attributable to the parent company after deduction was 67 million yuan, with a year-on-year increase of 74.99%.
In addition, in 2022q1, the company achieved an operating revenue of 793 million yuan, a year-on-year increase of 49.30%; The net profit attributable to the parent company was 73 million yuan, a year-on-year decrease of 1.26%; The net profit attributable to the parent company after deducting non-profit was 64 million yuan, a year-on-year decrease of 3.21%.
The strategy of “health hardware IDM” has been continuously upgraded to accelerate the expansion of beauty and health categories
In terms of products, 1) in 2021, the company’s kitchen and bathroom health products achieved a revenue of 2.613 billion yuan, a year-on-year increase of 41.38%. Driven by technological innovation, the company has created an intelligent linkage scheme for kitchen and bathroom space, which has been newly upgraded in the fields of shower, faucet, intelligent toilet and so on. In 2021, the company acquired Xiamen Bgt Group Co.Ltd(300774) Technology Co., Ltd. to further improve the R & D and manufacturing capacity of intelligent toilet. 2) The revenue of beauty and health products was 114 million yuan, a year-on-year increase of 144.77%. The company continues to expand the development of beauty and health sub categories, and has successively launched Spa Beauty shower, beauty instrument, tooth flushing instrument, hair conditioner, intelligent skin tester and other single products. In 2021, the company’s R & D investment in beauty and health products accounted for more than 10% of sales, and 67 patents were newly applied, including 22 invention patents, breaking through a number of key technologies to promote the rapid development of business.
Actively expand the “home space” experience center and gradually consolidate the “Songlin · home” brand model
In 2021, “Songlin · family” achieved an income of 102 million yuan, a year-on-year increase of 468.27%. The company has established a whole private brand model integrating “home space integrated home products, whole process closed-loop service and independent self operated carrier platform”. By opening a large self operated brand experience center and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) f2c model, the company provides customers with all-round new experience and services. At the same time, the company adopts the mode of “one store and one factory”, and is equipped with a small processing plant integrating the functions of “simple processing and logistics storage” in the city where the physical store of the experience center operates, so as to ensure the delivery capacity of products and services in an all-round way. In 2021, the second “Songlin · Jia” large-scale Experience Center opened in Quanzhou, and 10 large-scale self owned brand experience centers such as Putian, Nanchang and Beijing are in preparation.
The profitability is affected by the short-term impact of raw materials, and the expenses are well controlled during the period
In the 21st year, the company’s comprehensive gross profit margin was 29.54%, with a year-on-year decrease of 5.01pct, mainly due to the rise of raw material prices and the adjustment of product sales structure. The gross profit margin of 22q1 company was 29.04%, down 2.82pct year-on-year. Under the comprehensive influence, the net interest rate of the company in 21 years was 10.48%, a year-on-year decrease of 2.81 PCT; The net interest rate of 22q1 company was 9.47%, down 4.40pct year-on-year.
In terms of period expenses, the company’s expense rate during the 21-year period was 18.14%, with a year-on-year decrease of 2.28pct. The sales / management / R & D / financial expense rate was 4.00% / 7.92% / 5.70% / 0.53% respectively, with a year-on-year increase of + 0.21 / – 1.02 / – 0.63 / – 0.84pct respectively. The increase in the sales expense rate was mainly due to the depreciation of the use right assets of the experience store and the increase of corresponding supporting manpower and change expenses.
Investment suggestion: the company adheres to the category expansion with health technology as the core, actively develops the IDM market of health hardware category, and continues to expand the layout of “Songlin · Jia” offline experience center. Driven by dual engines, the future performance is expected to grow steadily. We estimate that the operating revenue of Xiamen Solex High-Tech Industries Co.Ltd(603992) 20222024 will be RMB 3.658 billion, 4.572 billion and 5.637 billion, with a year-on-year increase of 22.88%, 24.99% and 23.29%; The net profit attributable to the parent company was 367 million yuan, 471 million yuan and 560 million yuan, with a year-on-year increase of 21.83%, 28.35% and 18.94%. The corresponding PE was 15.7x, 12.3x and 10.3x, giving a Buy-A investment rating.
Risk warning: industry competition intensifies the risk; Risk of sharp fluctuations in raw material prices; The risk of recurrent outbreaks.
