\u3000\u30 Shaanxi Zhongtian Rocket Technology Co.Ltd(003009) 79 Huali Industrial Group Company Limited(300979) )
The operating profit of the parent company was RMB 1.26 billion in the first quarter, with a year-on-year increase of 4.46% and a year-on-year net profit of RMB 1.24 billion. Under the US dollar standard, the revenue was US $650 million, with a year-on-year increase of 14.13%, and the net profit was US $102 million, with a year-on-year increase of 15.72%, which was better than the RMB standard.
The change trend of customer structure and product structure is obvious. In the first quarter, the price increased significantly and the quantity lagged slightly. In the whole year, the improvement trend of product structure is obvious. Volume price split: Q1 sold 51 million pairs, with a year-on-year increase of 7.09%, a month on month decrease of 6 million pairs, and ASP increased by 6.8 percentage points in US dollars. The quantity of Q1 is lower than the company’s expectation, mainly due to the long shutdown time under the epidemic in Vietnam and the unsaturated attendance rate of employees (mainly reflected in February), which makes the production progress somewhat backward. At the same time, a small part of the goods are not delivered in time due to customers. The unit price of the company’s products has increased significantly. First, the customer structure factors, and second, the customer’s own products have changed. According to customers, the growth rate of the company’s top five customers in the first quarter was 17.47%, faster than that of the company as a whole. Nike’s order revenue has increased by 23%, and Nike brand is the main force of growth, with sales exceeding converse; The growth rate of VF is 14.72%, and the main brand is vans; Deckers group’s growth rate was 12.82%, of which Hoka’s growth rate remained high, 40% – 50%. Looking forward to the whole year, the unit price increase brought by the improvement of the company’s product structure will be an important force for revenue growth this year. At present, the production progress in terms of quantity is expected to catch up well with the stabilization of the epidemic in Vietnam.
The profit margin has been affected by the low attendance rate in the short term and has returned to normal. In the first quarter, the company’s gross profit margin was 25.65%, with a year-on-year decrease of 2.7 points and a month on month decrease of 1.2 points. The year-on-year decrease was due to the new amortization factor of the new factory put into operation in Q1 last year. The month on month decrease was due to the prolonged downtime in February and the epidemic affected the attendance of employees; Attendance has improved significantly in March and April, and this factor will be eliminated in the next quarter. The net profit margin was 15.72%, basically stable year-on-year and month on month, and remained optimistic throughout the year.
On the whole, the company remained optimistic throughout the year, and its long-term competitive advantage was prominent. The time when the epidemic has affected production has passed. The annual volume and price of the company are determined. With the recovery of production progress, the annual gross profit rate will rise, and the return of income tax rate to normal is also a positive force for profit margin. In terms of future production capacity, the climbing of new factories and the expansion of old factories will continue to contribute to new production capacity. Recently, the company issued an announcement to purchase land assets from related parties for Communist expansion, and substantial progress has been made in plant expansion. We believe that the company’s share in the field of sports shoes OEM will continue to increase, with strong profit stability.
Investment suggestion: we believe that the future performance of the company is highly uncertain at this stage, and the current valuation is in a low position after listing. Combined with the company’s production capacity and orders on hand, the company’s net profit from 2022 to 2024 is expected to be RMB 3.465 billion, 4.218 billion and 5.122 billion respectively, with growth rates of 25.19%, 21.74% and 21.43% respectively. At present, the corresponding PE of the stock price is 23.09, 18.96 and 15.62 times respectively, maintaining the “recommended” rating.
Risk tip: the epidemic situation in Southeast Asia exceeded expectations, the price rise of raw materials exceeded expectations, and the price rise of sea freight exceeded expectations.
