\u3000\u3 Shengda Resources Co.Ltd(000603) 868 Shanghai Flyco Electrical Appliance Co.Ltd(603868) )
Key investment points
Performance summary: in 2021, the company achieved a revenue of 4.01 billion yuan, a year-on-year increase of 12.3%; The net profit attributable to the parent company was 640 million yuan, a year-on-year increase of 0.4%; Deduct non net profit of 580 million yuan, a year-on-year decrease of 1.7%. In a single quarter, Q4 company achieved a revenue of 1.14 billion yuan, a year-on-year increase of 7.4%; The net profit attributable to the parent company was 140 million yuan, a year-on-year decrease of 17.6%. In 2022, Q1 company achieved a revenue of 1.12 billion yuan, a year-on-year increase of 27.5%; The net profit attributable to the parent company was 240 million yuan, a year-on-year increase of 59.1%. In addition, the company plans to distribute a cash dividend of 10 yuan for every 10 shares, with a total cash dividend of 440 million yuan and a dividend rate of 68%.
The price of main products increased smoothly and the revenue continued to grow. During the reporting period, focusing on the two core competitiveness of "R & D innovation" and "brand operation", the company built a multi-dimensional product innovation matrix, deepened the reform of marketing channels and promoted the growth of the company's revenue. In terms of products, the company's personal care appliances, household appliances and electrical appliances achieved revenue of 3.7/1.8/0.3 billion yuan respectively, with a year-on-year change of 11.2% and 23.1% / - 23.7% respectively. Among them, the revenue of the company's main product razor has achieved rapid growth. We speculate that the revenue of the company's razor accounts for about 70%. During the reporting period, the company launched innovative products such as inductive "star shaver" and portable "space flying saucer shaver" to promote the optimization of shaver product structure. In 2021, the company's new sales of medium and high-end razors accounted for 20.3%, and the average price of razors increased by 25.2% year-on-year, helping the rapid growth of razor revenue.
Direct supply + refinement, channel reform and efficiency upgrading. During the reporting period, the company continued to improve the diversified channel layout, build a three-dimensional marketing system combining Ka terminal and regional distribution, and continue to promote channel reform. Online, the company continued to deepen the online "C-end" reform, continuously improved the operation level of self operated e-commerce, and effectively optimized the product structure. By the end of 2021, the company has established 19 sales subsidiaries of home appliance manufacturers. Offline, the company continued to promote the offline "direct supply", transformed the original dealers into operation service providers, and effectively improved the company's ability to control offline channels. In addition, the company divided the national regional distribution channels into five regions for flat and grid management, continued to develop new high-quality dealers, further expanded in a sinking manner, and strengthened the operation efficiency of offline channels. Online "C-end" and offline "direct supply" have promoted the proportion of direct sales to increase significantly. In 2021, the proportion of direct sales of the company reached 38.2%, an increase of 27.1pp year-on-year.
Direct selling + price increase, and the gross profit margin increased significantly. By increasing the proportion of direct sales and optimizing the product structure, the company improves the gross profit margin and fully smoothes the risk of price fluctuation of raw materials. During the reporting period, the gross profit margin of the company was 47%, with a year-on-year increase of 5.8pp. In terms of expense ratio, the company's sales expense ratio was 19.2%, with a year-on-year increase of 7.4pp, mainly due to the channel reform and the increase of relevant marketing investment; The management fee rate was 7.3%, up 1.5pp year-on-year. Overall, the company's net interest rate was 15.9%, down 1.9pp year-on-year. In the future, with the improvement of the efficiency of channel operation and marketing investment, the company's sales expense rate may be optimized and its profitability is expected to be improved.
The proportion of high-end products increased and Q1 profits accelerated. According to the previous operating data of the company from January to February, benefiting from the rapid volume of new products, the sales proportion of medium and high-end razors of the company further increased to 43.2% from January to February 2022, and the average sales price of razors also increased by 47.6% year-on-year. The increase in the proportion of medium and high-end products further promoted the optimization of the company's profitability. Q1's gross profit margin increased by 9.9pp to 54.1% year-on-year, and its net profit margin increased by 4.2pp to 21.1% year-on-year. The product structure is optimized, the channel reform is effective, and the company's profits are accelerated.
Profit forecast and investment suggestions. As the leader of personal care appliances, the company has multi-dimensional optimization of product channels, improved operation efficiency, and is expected to steadily improve its profitability. It is expected that the EPS will be 1.99/2.40/2.85 yuan from 2022 to 2024, and the compound growth rate of performance in the next three years will be 24.7%, maintaining the "hold" rating.
Risk warning: the price of raw materials may fluctuate sharply, the terminal sales are less than expected, and the market competition intensifies the risk.
