\u3000\u30 Fawer Automotive Parts Limited Company(000030) 06 Chongqing Baiya Sanitary Products Co.Ltd(003006) )
Event: Chongqing Baiya Sanitary Products Co.Ltd(003006) released the first quarterly report of 2022. In the first quarter of 2022, the company achieved a revenue of 432 million yuan, a year-on-year increase of 6.59%; The net profit attributable to the parent company was 554.16 billion yuan, a year-on-year increase of – 31%; The non net profit deducted was 54.394 million yuan, a year-on-year increase of – 29.23%. The impact of the epidemic superimposed on the high base in the same period last year, and the growth rate of Q1 slowed down slightly.
The cost investment accumulates the growth of the brand and the short-term adjustment of profitability. 1) On the profit side, the gross profit margin of 2022q1 company is 44.76% (- 0.5pct.), The net interest rate attributable to the parent company is 12.83% (-6.99pct.). 2) On the expense side, the rates of sales, management, R & D and financial expenses of 2022q1 company are 21.7%, 4.54%, 3.3% and – 0.14% respectively, + 6.51, + 0.87, -0.07 and + 0.06pct. Sales expenses increased by 52.3% year-on-year, mainly because the company has continued to increase investment in marketing and promotion since 21q2, and the short-term profit margin is under pressure. Looking forward to 2022, the company will focus on cost investment and the growth of energy storage brand. It is expected that the annual cost rate will return to the normal level.
Core products drive growth, with double-digit growth in sanitary napkin business. 1) Sanitary napkins: in 2021, the revenue of the company’s own brand sanitary napkins products was 1.184 billion yuan (+ 25.0%), accounting for 80.96% (+ 5.22pct.), The company complied with the consumption trend of sanitary napkin products and accelerated the promotion of new products and key single products. We calculated that the revenue of sanitary napkin products 22q1 still maintained double-digit growth year-on-year, and the product structure continued to be optimized and adjusted (the sales proportion of medium and high-end products in 2021 has exceeded 95%), driving the improvement of the company’s revenue and performance. 2) Diapers: in 2021, the revenue of the company’s own brand diaper products was 148 million yuan (- 3.9%), accounting for 10.14% (- 2.20 PCT.), We calculate that the diaper business of 22q1 is still declining year-on-year. Among them, the products of finished pants benefit from the rapid growth of category penetration and sales. In the future, the company will also seize the growth opportunity of the industry and develop the finished pants business.
Online e-commerce channels have been actively developed, and equity incentive objectives have demonstrated confidence. In 2021, the company’s e-commerce channel revenue was 210 million yuan (+ 36.8%), and we calculated that 22q1 e-commerce channel still increased year-on-year. With the company actively developing e-commerce channels, increasing investment in online marketing resources, optimizing online organization and personnel structure, settling in large e-commerce platforms such as tmall, jd.com and vipshop, and actively participating in emerging channels such as live broadcast, group purchase and o2o, the company’s brand influence continues to improve. We believe that e-commerce channels are expected to continue to increase in volume. According to the company’s 2021 equity incentive plan, the revenue target of online business from 2022 to 2024 is based on 2020, with a growth rate of no less than 120%, 220% and 350%, corresponding to a year-on-year growth rate of 60.8%, 45.5% and 40.6% respectively, demonstrating the company’s growth confidence.
The offline core areas have been slightly adjusted, and other markets in China have been expanded in an orderly manner. In terms of regions, 1) core regions such as Sichuan, Chongqing, Yunnan, Guizhou and Shaanxi: affected by the repeated epidemic at the end of last year, it is estimated that the growth rate of 22q1 has declined slightly compared with the same period. It is expected that with the company’s continuous deepening of the distribution network in the core market, it is expected to achieve the annual growth target. According to Nielsen’s data quoted in the company’s annual report, the company’s free point brand ranked first in Chongqing and second in Sichuan and Yunnan, Guizhou and Shaanxi in 2021. 2) In other parts of China, with the expansion of KA customer coverage, we calculate that the revenue in other parts of China in 22q1 is growing rapidly and the market is expanding orderly.
Investment suggestion: the company continues to optimize its product structure, develop in a coordinated manner through multiple channels, and demonstrate its confidence in development through equity incentive. We expect the company to achieve revenue of RMB 1.82 billion, 2.23 billion and 2.71 billion from 2022 to 2024, with an increase of 24.5%, 22.4% and 21.6% at the same time. The net profit attributable to the parent company is RMB 270 million, 320 million and 380 million, with an increase of 19.6%, 18.6% and 17.4% at the same time. The EPS is RMB 0.63, 0.75 and 0.88, maintaining the “overweight” rating.
Risk tips: the risk of substantial fluctuations in raw material prices, increased market competition and less than expected channel expansion
