\u3000\u3 Shengda Resources Co.Ltd(000603) 515 Opple Lighting Co.Ltd(603515) )
Key investment points
Performance summary: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 8.85 billion yuan, a year-on-year increase of 11%; The net profit attributable to the parent company was 910 million yuan, a year-on-year increase of 13.4%. In a single quarter, Q4 company achieved a revenue of 2.69 billion yuan, a year-on-year decrease of 1.9%; The net profit attributable to the parent company was 280 million yuan, a year-on-year decrease of 2.4%. In 2022, Q1 company achieved a revenue of 1.46 billion yuan, a year-on-year decrease of 17.1%; The net profit attributable to the parent company was 70 million yuan, a year-on-year decrease of 50.9%. In addition, the company plans to pay a cash dividend of 0.5 yuan per share (including tax). The total amount of cash dividend is expected to be about 380 million yuan, with a dividend rate of 41.1%.
Comprehensively focus on core business and continuously strengthen channel operation. The company continues to strengthen its channel operation capability. (1) In terms of home channels, the company promoted the transformation and upgrading of channel terminals, strengthened the customer acquisition capacity of terminal stores, conducted in-depth operation around the main products, and the sales of relevant main products accounted for more than 40%. In addition, the company has deeply cultivated and sunk channels, and nearly 3000 water, electricity and light supermarkets / special areas have been developed during the reporting period. (2) In terms of business license channels, the company further won a number of benchmark projects including Li Ning, consolidating its competitiveness in the field of large commercial projects. (3) In terms of e-commerce channels, while focusing on key platforms, the company has actively laid out new platforms and achieved rapid development on multiple platforms. The sales of online intelligent products increased rapidly, and online smart home lighting accounted for more than 40% during the reporting period. (4) In terms of overseas business, the company adheres to the global independent brand development strategy and has constructively exported a number of benchmark projects in Saudi Arabia, Dubai, Indonesia, Kuwait and other countries.
Improve operation efficiency, profitability and optimize adversity. In 2021, the company’s comprehensive gross profit margin was 33%, a year-on-year decrease of 4.7pp. We speculate that it is mainly due to the continuous rise in the price of raw materials and the adjustment of accounting standards. In terms of cost rate, the company cultivates internal skills, improves operation efficiency, and continuously optimizes the cost rate. In 2021, the company’s sales expense ratio was 15.8%, with a year-on-year decrease of 4.1pp; The rate of administrative expenses was 7%, with a year-on-year decrease of 0.3pp; The financial expense ratio was 0.3%, a year-on-year decrease of 0.1pp. Overall, the company’s net interest rate was 10.3%, with a year-on-year increase of 0.3pp.
Q1 operating pressure. In terms of revenue, the company’s revenue performance is under pressure due to the repeated epidemic and the weakening of real estate. In 2022q1, the company’s comprehensive gross profit margin was 31.4%, a year-on-year decrease of 5.9pp. In terms of expense rate, the company’s sales expense rate, management expense rate and financial expense rate were 19.4% / 9.5% / 0.4% respectively, with a year-on-year change of – 2.1pp / + 0.8pp / + 0.4pp. Overall, the company’s net profit margin was 4.4%, down 3.3pp year-on-year.
Profit forecast and investment suggestions. The growth rate of the industry slows down, the company actively responds, the channel operation improves efficiency, the commercial business advances steadily, and the operation is expected to return to the growth track. The EPS of the company is expected to be 1.29/1.52/1.76 yuan from 2022 to 2024 respectively, maintaining the “hold” rating.
Risk warning: the price of raw materials may fluctuate sharply and the market competition intensifies.
