\u3000\u3 China Vanke Co.Ltd(000002) 853 Guangdong Piano Customized Furniture Co.Ltd(002853) )
Key investment points
The company’s performance is slightly lower than market expectations. In 2021, the company realized an operating revenue of 1.824 billion yuan, a year-on-year increase of + 22.10%; The net profit attributable to the parent company was -729 million yuan, a year-on-year increase of -470.05%; The net profit attributable to the parent company after deducting non-profit was -733 million yuan, a year-on-year increase of -490.78%; Excluding the impact of impairment, the net profit attributable to the parent company was 266 million yuan in 2021, a year-on-year increase of + 35.02%. In 2022q1, the operating revenue was 236 million yuan, a year-on-year increase of – 31.84%; The net profit attributable to the parent company was 19 million yuan, a year-on-year increase of – 46.87%; The net profit attributable to the parent company after deducting non-profit was 16 million yuan, a year-on-year increase of – 48.93%.
The retail channel has been steadily expanded and the bulk business has been continuously optimized. According to different channels, 1) in 2021, the company’s retail business revenue was 911 million yuan, a year-on-year increase of + 20.90%. By the end of the year, the total number of county-level stores / distribution companies had expanded to 734, accounting for 992 / 131% of the total number of county-level stores, accounting for the overall distribution rate of clothes cabinets, respectively. In addition to the traditional distribution and retail mode, the company has steadily expanded new channels such as package / bag / new retail / designer, and further improved the retail channel sales system. The company empowers the distribution stores at multiple levels. In 2021, the revenue of a single store was + 14.56% year-on-year; 2) The revenue from bulk business was 879 million yuan, a year-on-year increase of + 23.39%. The company continued to optimize the customer structure, focusing on core customers such as high-quality central enterprises and engineering channel dealers. In 2021, 11 engineering dealers were added, with a total of 56 cooperation, promoting multi category cooperation and further improving the sales of single projects.
Significant provision for impairment and impact of epidemic control, short-term profit under pressure. In terms of profitability, the company’s gross profit margin in 2021 was – 0.12pp to 33.96% year-on-year, and the decline in gross profit margin was mainly due to the increase in the proportion of bulk business; The net interest rate attributable to the parent company increased from – 53.15pp to – 39.96% year-on-year, mainly due to the impact of Evergrande event. In 2021, the company made provision for credit impairment of 961 million yuan and asset impairment of 42 million yuan, which increased by 35.02% year-on-year after excluding the impact of impairment. By the end of 2022q1, the book balance of the company’s accounts receivable was 308 million yuan and the book balance of notes receivable was 163 million yuan. The company had fully accrued impairment, optimized the structure of accounts receivable and controllable overall risk. In terms of period expense rate, the company’s expense rate during 2021 was + 0.35pp to 16.24% year-on-year, of which the sales / management / R & D / financial expense rate was + 1.33pp / – 0.81pp / – 0.24pp / – 0.17pp to 9.92% / 5.99% / 2.83% / 0.33% year-on-year respectively. The gross profit margin of 2022q1 company was 29.76%, year-on-year -1.84pp, and the net profit margin attributable to the parent company was 7.91%, year-on-year -2.23pp, mainly due to the serious pressure on the bulk channel under the influence of the epidemic.
The cash flow situation is expected to improve gradually after the relevant funds are recovered. The company’s operating cash flow in 2021 was -321 million yuan, a year-on-year increase of – 147.28%; In 2022q1, the operating cash flow was -114 million yuan, a year-on-year increase of + 69.73%. The net operating cash flow was negative, mainly due to the non payment of due receivables of real estate developers. Subsequently, as the company continues to optimize the customer structure of Engineering channels, the operating cash flow is expected to gradually improve.
Profit forecast and investment rating: the company has deeply cultivated customized retail channels, continuously improved the retail channel sales system, and continued to optimize bulk business. Considering the short-term impact of the epidemic, we lowered the net profit attributable to the parent company from 2022 to 2023 to 250 / 310 million yuan (originally predicted to be 300 / 340 million yuan), and the net profit attributable to the parent company in 2024 is expected to be 360 million yuan, corresponding to 7 / 6 / 5x PE from 2022 to 2024, maintaining the rating of “overweight”.
Risk tip: the completion is not as expected by the market, business transformation is hindered, capital occupation increases, etc.
