\u3000\u3 Shengda Resources Co.Ltd(000603) 187 Qingdao Hiron Commercial Cold Chain Co.Ltd(603187) )
Performance summary: in 2021, the company achieved a revenue of 2.66 billion yuan, a year-on-year increase of 40.8%; The net profit attributable to the parent company was 230 million yuan, a year-on-year decrease of 16%; After excluding the impact of equity incentive expenses, the company realized a net profit of 260 million yuan, a year-on-year increase of 2.2%. In terms of quarter on quarter revenue, the company achieved a year-on-year increase of 3.94 billion yuan, with a revenue of 3.95%; The net profit attributable to the parent company was 30 million yuan, a year-on-year decrease of 40.5%; The net profit attributable to the parent company after deduction of non-profit was 20 million, a year-on-year decrease of 6.2%, mainly due to the receipt of more government subsidies. In 2022, Q1 company achieved a revenue of 840 million yuan, a year-on-year increase of 47.8%; The net profit attributable to the parent company was 80 million yuan, a year-on-year increase of 24.8%. In addition, the company plans to distribute cash dividends of 0.3 yuan per share and 0.4 shares per share, with a total cash dividend of 100 million yuan and a dividend rate of 38.5%.
The company’s revenue continued to increase. According to AVC data, the retail volume of freezers reached 9.22 million units in 2021, with a year-on-year increase of 8%; Retail sales reached 12.3 billion yuan, a year-on-year increase of 11.2%, and the freezer industry continued to grow. As the leader of commercial display cabinets, the company has benefited from the growth of the industry and the continuous development of the company’s market, and its annual revenue has achieved rapid growth. In terms of products, the company’s commercial freezers, commercial refrigerators, supermarkets display cabinets and commercial smart cabinets achieved revenue of 15.6/6.7/2.2/110 million yuan respectively, with a year-on-year increase of 29.6% / 62.2% / 32.3% / 339.6% respectively; In terms of regions, the company’s domestic sales revenue reached 2.09 billion yuan, a year-on-year increase of 66.5%; Due to the impact of the epidemic, the demand of overseas customers was delayed, and the export revenue was 460 million yuan, a year-on-year decrease of 15.8%.
Profitability is under short-term pressure. During the reporting period, affected by the rise of raw material prices, the appreciation of RMB and the decline of sales prices of some customers, the company’s comprehensive gross profit margin was 20.8%, a year-on-year decrease of 7.3pp. In terms of expense ratio, the company’s sales expense ratio was 4.6%, with a year-on-year increase of 0.6pp; The management expense ratio was 6.1%, unchanged year-on-year; Due to the decrease of exchange loss compared with the same period of last year, the financial expense rate of the company was – 0.2%, with a year-on-year decrease of 1.4pp. Generally speaking, the net interest rate of the company was 9.1%, with a year-on-year decrease of 5.2pp.
Equity incentive shows confidence and fixed growth helps to expand production capacity. During the reporting period, the company issued the 2021 stock option and restricted stock plan, and planned to grant 2.582 million stock options and restricted shares to the incentive objects at the price of 53.51/236.76 yuan / share respectively. The performance assessment was based on the 2020 revenue, and the growth rate of revenue or net profit from 2021 to 2023 was no less than 20% / 40% / 60%, demonstrating the company’s confidence in development. In addition, during the reporting period, the company plans to implement the fixed growth plan and raise no more than 1 billion yuan, of which 780 million yuan will be used for the production expansion project with an annual output of 1 million high-end vertical refrigerated display cabinets to help the company’s capacity expansion.
Q1 continued high growth and improved profitability. During the reporting period, the company actively explored new markets while deepening the needs of original customers, and achieved good development in all business areas. The product orders increased compared with the same period last year, which promoted the high growth of the company’s revenue and performance. In terms of profitability, during the reporting period, the company’s comprehensive gross profit margin was 22.1%, a year-on-year decrease of 0.6pp and a month on month increase of 3.8pp; The net profit margin of the company was 9.8%, a year-on-year decrease of 1.5pp, a month on month increase of 4.4pp, and the profitability improved month on month. We believe that the main reason is that the company transmitted some cost pressure after renegotiating with customers in 2022.
Profit forecast and investment suggestions. The demand for refrigeration equipment is strong, the company has obvious competitive advantage, the profit is improved month on month, and the trend is good. It is estimated that the EPS from 2022 to 2024 will be 1.45/1.83/2.24 yuan respectively, maintaining the “hold” rating.
Risk tip: the price of raw materials may fluctuate sharply, the expansion of new products is less than expected, and the overseas expansion is less than expected.
