\u3000\u3 Bohai Water Industry Co.Ltd(000605) 080 Zhejiang Natural Outdoor Goods Inc(605080) )
The prosperity of the track drives the rapid growth of the company’s business, with revenue + 45% / performance + 38% in 2021. The company’s annual revenue / performance in 2021 was 842 / 220 million yuan respectively, with a year-on-year increase of + 44.9% / + 37.6% respectively. 2) the revenue / performance in 2021q4 was 177 / 36 million yuan respectively, with a year-on-year increase of + 38% / + 14% respectively. The slowdown in Q4 performance growth was mainly due to the increase of automation equipment R & D expenses and bonus payment. 3) Profit quality: the gross profit margin in 2021 was – 1.9pcts to 38.8%. We judged that it was mainly due to changes in accounting standards, exchange rates and other reasons; The ratio of sales / management / R & D / financial expenses was – 1.4 / + 0.5 / – 0.1 / – 1.1pcts to 1.4% / 5.1% / 3.5% / 0.01%. The decrease in financial expenses was mainly due to the increase in interest income during the period. The year-on-year consolidated net interest rate was – 1.4% to – 1.1%.
2022q1 revenue + 47% / performance + 38%, rapid growth continued. 1) Under the strong demand for orders, the company’s revenue / performance in 2022q1 reached RMB 330 million / 85 million respectively, with a year-on-year increase of + 46.6% / + 37.8% respectively in 2021. 2) In terms of profit quality, the gross profit margin was – 4.7pcts to 36.5% year-on-year, the sales expense / management expense ratio was – 1.4 / – 3.7pcts to 1.5% / 3.1%, and the net profit margin was – 1.1pcts to 26.3% year-on-year. 3) According to the supply and demand of the industry and the situation of the company’s customers, the order demand of the company remains strong in 2022. With the expansion and volume of the company’s production capacity, we expect the annual revenue / performance to increase rapidly by 30% +.
The integrated production capacity expanded and continued to increase, and the sales of gas beds and bags increased rapidly. 1) In 2021, the company’s air bed / luggage / headrest cushion sales were RMB 636 million / 111 million / 56 million respectively, with a year-on-year increase of + 47% / + 60% / + 37% respectively. The growth was driven by both volume and price: ① the sales of air bed / luggage / headrest cushion were 423.3/185.31877000 respectively, with a year-on-year increase of + 11.0% / + 55.9% / + 40.1% respectively. The rapid growth of luggage sales was mainly due to the rapid growth of the company’s new product ice bag; ② We estimate that the sales unit price of inflatable mattress products has increased significantly year-on-year. 2) According to the company’s announcement, with the smooth progress of the raised investment project, the company’s comprehensive production capacity increased rapidly during the year. On the basis of expanding the production capacity of TPU composite fabric last year, the company will further strengthen the production capacity of back-end finished products.
Full downstream demand, in-depth cooperation and high-quality customers. 1) The epidemic has given birth to the rise of the outdoor industry, with strong demand in Europe and the United States downstream, driving orders from upstream companies. In terms of regions, the company’s products are mainly sold to Europe, America and other overseas regions. In 2021, the sales abroad / China were 672 / 170 million yuan respectively, with a year-on-year increase of + 48.6% / + 33.0%. 2) According to the company’s announcement, the demand for orders from customers in the industry is good. In 2021, the company sold 240 million yuan to the largest customer, accounting for 29% of the company’s revenue. According to the company’s announcement, the company has signed a strategic cooperation agreement with decathlon, and we judge that its cooperation scale will continue to grow rapidly in the future. In 2021, the sales of the top five customers totaled 372 million yuan, accounting for 44.2%. Based on youwo’s extensive customer resources, the company continued to deepen its cooperative relationship with customers.
Optimize operation turnover and prepare raw materials for production and operation. 1) At the end of 2021, the company’s inventory increased by 74.0% year-on-year to RMB 255 million. We judge that the year-on-year increase in inventory is mainly due to the company’s increase in raw material procurement and early production to meet the strong demand in peak seasons. In 2021, the number of inventory turnover days is 140 days / the number of accounts receivable days is 48 days, which is lower than that in 2020. 2) The net operating cash flow in 2021 was – 30.7% to 143 million yuan year-on-year, mainly due to the increase in payment for goods due to the company’s large stock of raw materials.
Investment advice. The company is a leading manufacturer in the field of outdoor products, with a strong vertical integrated industrial chain and abundant customer resources. We expect the net profit attributable to the parent company to be RMB 296 / 371 / 465 million respectively from 2022 to 2024. The current share price corresponds to 22 times of PE in 2022, maintaining the “buy” rating.
Risk warning: risk caused by covid-19 epidemic fluctuation; Price fluctuation risk of raw materials; Less than expected risk of capacity expansion; Order fluctuation risk of key customers; Exchange rate fluctuation risk.
