\u3000\u3 China Vanke Co.Ltd(000002) 511 C&S Paper Co.Ltd(002511) )
Key investment points
The income side of 2021q4 grew steadily, and 2022q1 showed weak performance due to price increase and epidemic disturbance. In 2021, the operating revenue reached 9.15 billion yuan, a year-on-year increase of + 17.0%; The net profit attributable to the parent company was 581 million yuan, a year-on-year increase of - 35.9%. Among them, the revenue of 2021q4 was 2.875 billion yuan, a year-on-year increase of + 26.8%; The net profit attributable to the parent company was 97 million yuan, a year-on-year increase of - 58.7%. In 2022q1, the revenue was 1.884 billion yuan, a year-on-year increase of - 10.4%; The net profit attributable to the parent company was 133 million yuan, a year-on-year increase of - 50.8%. On the revenue side, the revenue growth trend of 2021q4 company is good, and the revenue growth rate in 2021 is leading the industry; The decline of revenue in 2022q1 was mainly disturbed by price increase and epidemic situation. The profit side still has a significant decline due to cost pressure.
The consumption of new products increased steadily. By business, the income of household paper in 2021 was 8.66 billion yuan, a year-on-year increase of + 15.5%, accounting for 94.6%; The income of personal care products was 76.966 million yuan, a year-on-year increase of - 23.03%, accounting for 0.84%; The revenue from other products was 415 million yuan, a year-on-year increase of + 85.4%, accounting for 4.53%. According to different channels, the revenue of traditional models (including distributors and supermarkets) was 4.391 billion yuan in 2021, a year-on-year increase of + 3.5%; The revenue of non-traditional models (including e-commerce, commercial sales and new retail) was 4.344 billion yuan, a year-on-year increase of + 29.5%.
Re sort out the business sector and strengthen the cultivation of non-traditional dry towel categories. Focusing on long-term development, the Company re plans, optimizes and upgrades the product and brand matrix: 1) improve and optimize the three business segments of household paper, nursing products and health products, and list the high-end and high gross profit non-traditional dry towel category as the key strategic category in the future. 2) On the one hand, the household paper sector continues to promote the high-end of jierou brand, on the other hand, it reconstitutes the sun brand management team, independent accounting and flat operation, and develops in the direction of youth. 3) Accelerate the cultivation of personal care and health boutique business, reserve new categories such as alcohol wet towel, compressed towel, disposable bath towel, mouthwash and pet care products, and continue to introduce talents in the field of personal care to optimize the organizational structure.
In 2021, the cost of raw materials and energy suppressed profitability, and the net profit margin of 2022q1 sales improved slightly month on month. The gross profit margin in 2021 is - 5.4pp to 35.92% year on year; The net profit margin on sales rose from -5.23pp to 6.35% year-on-year. The expense rate during the period increased from + 1.07pp to 27.68% year-on-year; Among them, the sales expense rate + 1.97pp to 21.71%; The management expense rate (including R & D expense rate of 2.32%) increased from -1.05pp to 6.05% year-on-year; The financial expense ratio increased from + 0.15pp to -0.08% year-on-year. The gross profit margin of 2022q1 was 32.81%, with a year-on-year ratio of -7.65pp and a month on month ratio of -3.11pp; The net sales interest rate was 7.07%, with a year-on-year increase of -5.83pp and a month on month increase of + 0.72pp. In 2021, the net profit margin of sales decreased quarter by quarter, which was mainly affected by the high cost and the increase of marketing investment; The profitability of 2022q1 improved slightly month on month, mainly due to the decline of sales expense rate.
Outstanding performance in cash flow and operating efficiency. In terms of cash flow, the company realized a net operating cash flow of 1.32 billion yuan in 2021, a year-on-year increase of + 59.33%; The ratio of net operating cash flow / net income from operating activities is 202.47%; In 2022q1, the net operating cash flow was 247 million yuan, a year-on-year increase of - 26.1%; The ratio of net cash flow from operating activities to net income from operating activities was 162.73%. In terms of operation efficiency, the inventory turnover days in 2021 were 96.06 days, a year-on-year decrease of 7.75 days; The turnover days of accounts receivable were 43.85 days, with a year-on-year increase of 1.07 days. The inventory turnover days in 2022q1 were 101.29 days, a year-on-year decrease of 16.62 days; The turnover days of accounts receivable were 49.65 days, with a year-on-year increase of 8.71 days; The turnover days of accounts payable are 55.82 days; Up 4.76 days year-on-year.
Profit forecast and investment rating: considering the price of raw materials and the impact of the epidemic, we lowered the profit forecast for 20222023. We expect the net profit for 20222024 to be 710 million yuan, 880 million yuan and 1.08 billion yuan (the original forecast for 20222023 is 860 million yuan and 1.05 billion yuan), and the corresponding PE is 19, 15 and 12x respectively. The growth of the company's household paper business is relatively stable. At the same time, it is expected to open the second growth curve and maintain the "overweight" rating.
Risk warning: the price of raw materials rises; Industry competition intensifies; Personal care promotion is not as good as we expected.
