\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
Events
The company released 1q22 performance on April 27, realizing revenue of 4.124 billion yuan (+ 11.39%), net profit attributable to parent company of 648 million yuan (+ 12.40%) and deduction of net profit not attributable to parent company of 638 million yuan (+ 10.24); Excluding the impact of exchange rate, the income and net profit increased by 14.13% and 15.16% respectively, slightly lower than the previous expectation, mainly due to the impact of the epidemic in northern Vietnam on staff attendance at the beginning of the year and the high base in the same period last year.
Performance review
Core customers have a strong momentum and both volume and price have risen. 51.14 million pairs of sports shoes were sold in Q1, an increase of 7.1% at the same time; ASP increased by 6.8%, showing a bright performance, of which we estimate that Nike’s unit price has made a great contribution. The revenue of Nike / Deckers / VF / puma / UA, the top five customers, increased by 23.1% / 14.7% / 12.8% / 0.7% / 53.2% (US dollar caliber) respectively, of which the growth rate of Nike brand is expected to exceed 40% and the volume has exceeded converse.
The climbing of the new factory dragged down the gross profit margin and the net profit margin was stable. The gross profit margin fell by 2.72 to 25.65% year-on-year, mainly due to the fact that the efficiency of the new factory is still climbing and the attendance of employees is affected by the epidemic; During the period, the expense rate decreased by 0.8pct year-on-year to 5.42%, mainly due to the increase of interest and the decrease of financial expenses caused by the arrival of raised funds; The net interest rate increased by 0.14pct to 15.72%, basically stable.
The operation is healthy, and the epidemic affects the inventory turnover. The ending inventory increased by 34.4% year-on-year to 3.054 billion yuan, mainly due to the increase in the proportion of raw materials due to the slight delay in the pace of production and the delay in shipping of some brands. The net operating cash flow decreased by 11.5% to 377 million yuan, mainly due to the increase in goods preparation.
Capacity continued to expand and optimize, and the overall growth rate was optimistic. Considering that the first quarter is the off-season of production and the current production rhythm has returned to the level before the Spring Festival, the impact of the epidemic on the company’s annual production is expected to be limited. In the long run, three new plants put into operation in Vietnam in 21 years will continue to climb the slope and improve efficiency, and are expected to reach production capacity one after another; The vamp factory started production of finished product lines in 22 years; The phase I plant in Indonesia is expected to be put into operation in 22 years and contribute capacity in 23 years. Investment suggestions and risk tips
Investment suggestion: continue to be optimistic about the continuous growth of customer orders and structural optimization under the high boom track on the demand side; Supply side capacity expansion drives performance growth. Considering the company’s full orders and optimistic expectation of capacity expansion, the impact of the epidemic in the first quarter is limited, and the previous profit forecast is maintained. The net profit attributable to the parent company in 22-24 years is expected to be 3.523/44.05/5.352 billion yuan, corresponding to 22 / 18 / 15 times of PE, maintaining the “buy” rating.
Risk tips: lifting of sales restrictions, rising labor costs in Vietnam, continuous spread of overseas epidemic, etc.
