\u3000\u3 Shengda Resources Co.Ltd(000603) 558 Zhejiang Jasan Holding Group Co.Ltd(603558) )
Event: the company released the 21st Annual Report and the first quarterly report of 22 years. In the 21st year, the company achieved a revenue of 2.052 billion yuan (+ 29.7%), a net profit attributable to the parent company of 167 million yuan (+ 131.7%), a net profit attributable to the parent company of 153 million yuan (+ 128.0%) and an EPS of 0.43 yuan. It is proposed to distribute a cash dividend of 0.15 yuan per share (including tax).
22q1 company achieved a revenue of 532 million yuan (+ 28.5%), a net profit attributable to the parent company of 82 million yuan (+ 74.1%), and a net profit attributable to the parent company of 66 million yuan (+ 40.7%) after deduction of non profits.
The income recovered and grew rapidly, and the impairment of goodwill and equity incentive expenses affected the net profit. In the past 21 years, the company achieved revenue of 2.052 billion yuan (+ 29.7%) and net profit of 167 million yuan (131.7%), including 9.13 million yuan of goodwill impairment and 36.53 million yuan of share based payment expenses recognized for employee equity incentive. Excluding these two effects, the company's net profit was 213 million yuan.
In terms of production capacity and output, the company's cotton socks production capacity continued to increase in the past 21 years, and the shipments from Vietnam / Jiangshan base were 210 million (+ 35%) and 160 million pairs (+ 33%) respectively; In addition, Guizhou Jiansheng plans 1000 hosiery machines, of which 440 hosiery machines in the first phase have been put into operation in Q3. In terms of seamless knitting, due to the limitation of the epidemic in Vietnam, the production of factories in Guizhou has been expanded, and the number of seamless knitting machines has increased from 173 to 309. At present, the startup rate in Vietnam has reached 70%; The annual output of the company is 21.94 billion pairs of cotton socks (+ 218.3 million), and the annual output of the company is 2.53 billion pairs of cotton socks (+ 218.3%).
Revenue by business: the company's revenue from cotton socks and seamless business in 21 years was 1.503502 billion yuan respectively, with a year-on-year increase of + 41.8% / + 4.8%; The sales volume of cotton socks reached 383 million pairs (+ 34%), the average unit price increased by nearly 6%, and the business volume and price of cotton socks increased simultaneously; The sales volume of seamless business was 21.37 million pieces (+ 23.08%), and the average price decreased by about 15%, which was mainly due to the change of product structure.
Driven by the cotton socks business, the gross profit margin of the company has recovered significantly: in 21 years, the gross profit margin of the company was 26.76% (+ 6.66pct), which is mainly due to the recovery of capacity utilization, the price adjustment of products after the price rise of raw materials and the optimization of customer structure. By business, the gross profit margin of cotton socks / seamless is 31.2% (+ 8.6pct) / 11.7% (- 2.6pct) respectively. The gross profit margin of cotton socks business returned to a higher level, mainly due to price increase and customer structure optimization. The seamless product business is still recovering in the past 21 years, and the gross profit margin has further declined, which is mainly due to the epidemic situation experienced by the company in the past two years, excessive concentration of customers and low capacity utilization. It is expected that with the expansion of new customers of seamless business and the increasing order cooperation of key customers, the revenue and profitability of seamless business are expected to increase simultaneously.
In the first quarter of 2022, the revenue and profit increased significantly, the growth rate of seamless business was high, and the annual performance growth was optimistic: Q1 company achieved a revenue of 532 million yuan (+ 28.5%) and a net profit attributable to the parent company of 82 million yuan (+ 74.1%); According to the previous announcement, the revenue / net profit from January to February were + 38% / + 137% respectively. The growth rate slowed down due to the epidemic in March. In the first quarter, the number of cotton socks changed little year-on-year, with a revenue of 346 million, an increase of 17% mainly due to the increase of unit price; The volume and price of seamless business increased, with seamless revenue of 186 million, an increase of 56% at the same time, mainly from the order growth of key customers such as decathlon and UNIQLO. In terms of profitability, the gross profit margin of Q1 was 28.1%. In terms of business, the gross profit margin of cotton socks remained at a normal level, and the seamless interest rate was still recovering, mainly due to the impact of the epidemic in Vietnam in the first quarter. On the whole, the revenue in the first quarter was growing rapidly, and the gross profit margin is expected to continue to improve with the recovery of seamless business in the future.
Investment suggestion: under the background of continuous optimization of customer structure and improvement of production capacity, we expect double-digit growth of cotton socks and 30-40% growth of seamless business in 22 years. It is estimated that the company's net profit attributable to the parent company in 202224 will be RMB 290 / 3.7 / 460 million, with a year-on-year increase of 74% / 26% / 26%, corresponding to EPS of RMB 0.74/0.93/1.17 and PE of 16 / 13 / 10 times. It will be rated as "Buy-A" for the first time.
Risk tip: the epidemic repeatedly affects production capacity and logistics, the rise of raw material costs can not be passed on to the downstream in time, the transfer of orders from core customers, etc.
