\u3000\u3 China Vanke Co.Ltd(000002) 791 Guangdong Kinlong Hardware Products Co.Ltd(002791) )
Key investment points
Event: the company released the 2021 annual report and the first quarterly report of 2022. In 2021, the revenue and net profit attributable to the parent were 8807 million and 889 million respectively, with a year-on-year increase of + 30.72% and + 8.83% respectively. The net profit deducted from non attributable to the parent was 881 million, with a year-on-year increase of + 9.91%, and the basic earnings per share was 2.77 yuan. In 2022q1, the revenue, net profit attributable to parent and net profit deducted from non parent were 1.292, - 89 and -93 billion respectively, with a year-on-year revenue of + 3.93%. The net profit attributable to parent and net profit deducted from non parent in the same period last year were 42.68 and 39.03 million yuan respectively.
Under the channel sinking + category expansion in 2021, the revenue grew steadily and rapidly, and the expenses continued to be diluted. Quarter by quarter, the company's 21q1-q4 revenue growth was + 55.4% / + 24.8% / + 29.0% / + 28.1% respectively. Q4 industry still maintained rapid growth under pressure. In terms of products, the company's annual revenue of door and window hardware system products, other building hardware and household products was 4.17/17.6/1.48 billion, a year-on-year increase of + 12.3% / + 86.6% / + 53.5%, and the growth rate of 21h2 was + 4.7% / + 124.7% / + 52.4%. Dragged down by the decline in real estate demand, the growth rate of traditional hardware revenue of 21h2 company slowed down, and other construction hardware products and household products grew faster and maintained high growth under the expansion of categories. Among them, the annual revenue of hybes intelligent lock was 460 million, a year-on-year increase of + 17.5%; The net profit margin of sales was 19.8%, with a year-on-year increase of + 4.4pct. The company achieved a comprehensive gross profit margin of 35.2% year-on-year (- 4.0pct). Among them, the gross profit margin of door and window hardware system, other building hardware and household products was 40.6% / 23.1% / 36.0% respectively, with a year-on-year increase of -3.4pct / - 6.9pct / + 1.2pct. On the one hand, the decline in comprehensive gross profit margin comes from the pressure on the cost side, on the other hand, it comes from the increase in the proportion of other construction hardware products with relatively low gross profit margin. In terms of expenses, the expense rate of the company during the 21 years was 20.4%, with a year-on-year increase of -2.0pct; Among them, the ratio of sales, management and R & D expenses was - 1.2pct / - 0.3pct / - 0.4pct year-on-year, and the expenses were continuously amortized under the conditions of cost reduction and efficiency improvement and high income increase. The company achieved a net profit margin of 10.9% in the whole year, with a year-on-year increase of -2.0pct. The company's excellent operating ability relatively effectively hedged the interference of the external environment and highlighted its steady operating ability.
Under the epidemic, the downturn of real estate and the adjustment of product structure, the income is under pressure, the cost of raw materials remains high, and the performance of 2022q1 is under pressure. The revenue of 22q1 company was + 3.9% year-on-year, and the main reasons for the slowdown of revenue growth were as follows: 1) the epidemic in China has been repeated since March, especially in the Yangtze River Delta, which affected the delivery of orders on hand; 2) The end of real estate policy 21q4 appears, but from the perspective of 22q1, the fundamentals are still looking for the bottom. The sales area of commercial housing in 22q1 is - 13.8% year-on-year, which has fallen sharply. In addition, the situation of real estate funds has not improved significantly, and the demand of industrial chain is depressed; 3) Actively adjust the product structure, control the sales proportion of other construction hardware with low gross profit margin, and judge that the proportion of 22q1 has decreased compared with 21 years, which also brings some pressure on the revenue side. In terms of cost, the prices of the company's main cost items such as aluminum alloy and stainless steel rose sharply again in 22q1 after a short decline in 21q4, resulting in the company's gross profit margin of -3.3pct month on month and -7.43pct year-on-year. The company continued to increase the channel sinking and category layout against the trend. Under the expansion of personnel recruitment, the sales expense of 22q1 was + 27.0% year-on-year, the management expense and equity incentive expense continued to be amortized and + 19.5% year-on-year. The sales expense rate and management expense rate were + 3.8pct / + 1.1pct respectively. The income was under pressure, the cost rose sharply again, and the expense investment continued. The net interest rate of 22q1 was - 11.0pct year-on-year, and the performance of 22q1 suffered a loss.
In the short term, we focus on the improvement of real estate and epidemic situation, and we are still optimistic about the high growth brought by category expansion and channel sinking in the medium and long term. In the short term, we believe that 21q4 of the real estate policy has been realized. With the loosening of the financing policy, the resumption of land acquisition by state-owned enterprises and high-quality private enterprises, the relaxation of local urban policies on both sides of supply and demand, and the gradual passing of the 21h1 high base period, the bottom of the real estate fundamentals is expected to come gradually, which will directly boost the company's income, and the gradual decline of the epidemic will also return the company's order delivery to normal. In the medium and long term, as the company continues to introduce and cultivate new categories against the trend, the rapid growth of prefecture level cities, counties and other markets under the channel sinking strategy, and actively expand to the development of non real estate fields such as small and medium-sized hotels / schools / hospitals, the company's revenue is expected to return to rapid growth.
Investment suggestion: as the real estate fundamentals stabilized and the recovery progress was slower than we expected, the company 22q1 suffered losses due to the pressure of real estate downturn, rising costs and continued increase in expense investment. We reduced the net profit attributable to the parent company from 22 to 23 years to RMB 1.06/1.459 billion (the original net profit attributable to the parent company was 1.344/1.806 billion). Mainly considering that the real estate recovery was slower than expected, we lowered the income assumption. The adjusted profit forecast corresponds to 22 / 16 times the current share price PE. The company has obvious advantages in channel / comprehensive supply capacity / service, reuse channels, realize the expansion of "asset light" category, accelerate its growth into a platform / integrated leader, and maintain the "buy" rating.
Risk warning: the total demand has fallen sharply; Category expansion did not meet expectations; Channel change; Increased competition; The sharp rise in the price of raw materials has led to lower profits than expected; There is a risk that the information used in the research report is not updated in time.
