\u3000\u30 Beijing Jingyeda Technology Co.Ltd(003005) 77 Anhui Korrun Co.Ltd(300577) )
The leader of luggage industry, 2b and 2C double leaders. The company started with the luggage OEM business in 2005. In 2015, relying on the Xiaomi ecological chain, the company launched Mi brand luggage products. In 2019, it extended to build its own brand "90 points" and opened the 2B and 2C dual business model. In the past 15-19 years, it has developed rapidly, with the revenue and net profit attributable to the parent CAGR reaching 38.2% and 40.4% respectively. In 2020, affected by the epidemic, the revenue and net profit attributable to the mother were - 27.87% and - 65.51% year-on-year respectively. In 2021, the performance showed a recovery, among which 2B revenue reached the highest level in history and has fully recovered to the pre epidemic level. 2C revenue increased slightly compared with 2020. On the whole, it has not fully recovered. The revenue is 2.289 billion yuan / yoy + 17.76% / 19-15.06%, and the net profit attributable to parent company is 180 million yuan / yoy + 131.03% / 19-20.31%, of which 2B / 2C revenue accounts for 64% / 33% and + 24.02% / + 3.19% respectively. 22q1's revenue / net profit attributable to parent company / net profit deducted from non parent company increased by + 35.56% / + 2.78% / - 40.63% year-on-year to RMB 612 million / 46.51 million / 12.6 million respectively, of which 2B / 2C's revenue increased by 45% ~ 50% / low single digits respectively. The decline in net profit deducted from non parent company was mainly dragged down by 2C business and 22q1 received RMB 38 million government subsidy to promote the growth of net profit attributable to parent company.
2B business: relatively resilient, expanding customers, capacity and category simultaneously. 2B business is the company's traditional advantageous business. In addition to being affected by the epidemic in 2020, it has shown a good growth trend from 18 to 21 years. The revenue in 2021 was + 24.02% year-on-year / + 11.03% compared with that in 19 years, which has returned to the pre epidemic level. It mainly benefited from the synchronous promotion of expanding customers, capacity expansion and category expansion: 1) expanding customers: cooperating with high-quality customers such as Nike, Decathlon and Dell for a long time, accelerating the elimination of backward production capacity and supplier optimization in the industry after the outbreak of the epidemic, So as to promote the company to accelerate customer expansion. Under the epidemic situation, the company's brand customer resources have become more perfect. In 20 years, it has expanded the sub brands Kipling of VF group, EASTPAK and Dickies of VF group in 21 years, expanded the sub brands JanSport and the northface of VF group in 2022, and entered puma, Yeti, Homedepot and other new customer supplier systems. The customer structure has been continuously consolidated and optimized. 2) Capacity expansion: the capacity is mainly distributed in Chuzhou, India and Indonesia. In 2021, Chuzhou / overseas capacity accounted for 40% / 60% respectively. The production capacity of Indonesia and India is in the process of orderly expansion. By the end of April 22, Indonesia's production lines have expanded from 120 at the end of 21 to 160. The company expects to further double to more than 240 by the end of 2022. At the same time, by the end of 22, India's production capacity is also expected to double compared with 40-50 production lines at the end of 21. 3) Category expansion: in order to seek long-term development, the company actively develops new categories. In 19 years, the company acquired the Indonesian Baodao factory and entered the Nike soft bag supply chain. In 20-21 years, the joint M & A fund completed the acquisition of Shanghai Jiale (UNIQLO / Gu manufacturer) and entered the field of clothing and fabric manufacturing. With the all-round and active promotion of expanding customers, capacity and category, we expect 2B business will still become an important growth point of the company's performance in the future, and its revenue contribution will be further improved.
2C business: adjust the fluctuation, and the loss situation is expected to improve. Affected by the epidemic, 2C business has fluctuated greatly in recent three years. The revenue in 19 / 20 / 21 was + 25.53% / - 43.06% / + 3.19% year-on-year respectively. There is still a large gap between 21 years and 19 years (- 41.24%) and before the epidemic. 2C business is mainly sold through two channels: online and distribution. Among them, online mainly sells the products of its own brand "90 points" + authorized brand "big mouth monkey". The distribution mode is mainly Xiaomi products and cooperates with Xiaomi in the mode of "cost price purchase / gross profit sharing". The revenue of online distribution business accounted for + 61.61% and + 26.61% respectively, accounting for + 61.61% and + 61.62% of the revenue of 2C / year, respectively. More expenses promote the good performance of the "90 points" business revenue side, but the net loss in 21 years is tens of millions, which is a drag on the company's performance. In the future, the company plans to optimize channels, reduce costs and increase efficiency. 90 brands have stopped overseas business at the end of 22q1. Xiaomi brand will optimize SKU and return to the overseas market. It is expected to achieve significant loss reduction at the 2C end in 22 years.
The net interest rate rebounded at a low level. 1) Gross profit margin: from 2015 to 2020, it basically fluctuated between 28% - 31%, including 25.98% (yoy-3.63pct) in 2018, mainly due to the increase in the proportion of low gross profit rice brand business. In 2021, the gross profit margin of 2B business decreased by 3.24pct to 25.97% (affected by the decline of capacity utilization, the appreciation of RMB and the rise of sea freight). 22q1 rose -2pct to 25.04% year-on-year, mainly affected by the rise of raw material price + sea freight. We judge that in the future, with the elimination of the above-mentioned short-term factors, the gross profit margin is expected to gradually rise. 2) Expense ratio: from 2015 to 2019, it fluctuated between 15% - 17%. In 2020, due to the impact of the epidemic, "90 points" increased promotion and investment, the sales cost increased. During this period, the expense ratio increased by + 7.5pct to 24.61%, decreased by 1.3pct to 23.29% in 21 years, and continued to -1.39pct to 22.22% in 22q1, but it is still at a high level. As the company increases cost management, we expect that the cost rate is expected to continue to optimize in the future. 3) Net profit margin attributable to parent company: from 2012 to 2019, it fluctuated between 8% - 12%. In 2020, due to the increase of expenses and asset impairment losses, it fell by 4.38pct to 4.01% year-on-year, rebounded by 3.86pct to 7.87% in 2021, and decreased by 2.43pct to 7.6% year-on-year in 22q1 due to the decline of gross profit margin. It is expected to rise further in the future with the improvement of gross profit margin and expense control.
Profit forecast and investment rating: the company is the leader in luggage in China. The epidemic accelerated the company's 2B customer expansion progress, but had a great impact on the 2C demand side. 2B business has outstanding advantages and strong toughness. It has recovered to the pre epidemic level in 21 years, and 2C business has been adjusted and has not fully recovered. The revenue of 22q1 grew rapidly, mainly from the increase of orders from old customers of 2B business + the contribution of new customers. We expect that with the gradual reduction of losses at 2C end, the company's profitability is expected to rebound. Comprehensively considering the impact of the epidemic, we expect that the net profit attributable to the parent company will increase by 14% / 22% / 23% year-on-year from 2022 to 24, and the EPS will be 0.85/1.04/1.28 yuan / share respectively, corresponding to PE 16 / 13 / 11x, which will be covered for the first time and rated as "overweight".
Risk tips: the epidemic situation worsens, the economy is weak, and the cost control is less than expected.
