\u3000\u3 Shengda Resources Co.Ltd(000603) 355 Kingclean Electric Co.Ltd(603355) )
Independent brands grew steadily, and new energy components expanded production capacity
In 2021, the company achieved a revenue of 7.946 billion yuan, a year-on-year increase of + 26.51%; 2021q4 achieved a revenue of 2.205 billion yuan, a year-on-year increase of + 8.07%; In 2022q1, the revenue was 2.351 billion yuan, a year-on-year increase of + 16.79%.
From the perspective of business: the independent brands, core parts and ODM OEM of the three major businesses are growing together. (1) Independent brands: in 2021, the independent brand business achieved a revenue of 1.316 billion yuan, a year-on-year increase of 43.33%. The business of independent brands has grown rapidly, and lake Jimmy mite remover and biyunquan intelligent water purifier have become the head of the category. According to zhongyikang, the retail sales of Lake vacuum cleaner in China’s offline vertical vacuum cleaner reached 95.64%, ranking first; The retail sales of Lake biyunquan water purifier in China’s offline desktop direct drinking machine reached 77.81%, ranking first. (2) Core parts: in 2021, the operating revenue was 1.191 billion yuan, with a year-on-year increase of 27.68%. In 2021, the company invested in the establishment of a wholly-owned subsidiary, lake new energy, for the new production capacity of key parts supporting industries such as new energy vehicles; Successfully acquired 100% equity of Shanghai Pajie, driving the rapid growth of precision key parts business; At the same time, the company plans to publicly issue 1.2 billion yuan of convertible bonds for key parts of new energy vehicles and other projects. After the corresponding production capacity is put into operation, it is expected to continue to contribute to the company’s revenue and performance. (3) ODM OEM: in 2021, the company’s ODM / OEM business achieved a revenue of 5.342 billion yuan, a year-on-year increase of 22.59%, of which the export business of garden tools and air purifiers increased significantly by 50% and 95% respectively, and the sales in the European market increased by 50% year-on-year.
Continue to increase R & D investment, and brand and marketing expenses continue to rise
In 2021, the company realized a net profit attributable to the parent company of 503 million yuan, a year-on-year increase of + 53.24%; In 2021q4, the net profit attributable to the parent company was 25 million yuan, a year-on-year increase of + 128.15%; In 2022q1, the net profit attributable to the parent company was 211 million yuan, a year-on-year increase of + 10.64%.
1) R & D investment continued to increase. In 2021, R & D expenses amounted to 436 million yuan, with a year-on-year increase of 40.44%. R & D expenses accounted for 5.48% of revenue. In 2021, the company applied for 336 patents and 235 authorized patents respectively. 2) Actively promote the construction of independent brands. In 2021, the sales expenses accounted for 5.62% of the revenue, of which the sales expenses in 2021q4 accounted for 8.44% of the revenue, with a year-on-year increase of + 6.09pct. The main reason is that the company launched a number of new floor washing machines in 2021q4, strengthened channel marketing, hired star endorsements and increased advertising, resulting in increased marketing expenses.
Implement profit distribution and distribute dividends to shareholders
According to the announcement of the company on April 29, 2022, the company plans to distribute a cash dividend of 10.0 yuan (including tax) to all shareholders for every 10 shares, with a stable return on investment.
Profit forecast and valuation
It is estimated that the operating revenue of the company from 2022 to 2024 will be 10.155 billion yuan / 11.764 billion yuan / 13.611 billion yuan respectively, with the corresponding growth rate of 27.81% / 15.84% / 15.70% respectively; The net profit attributable to the parent company was 961 million yuan / 1171 million yuan / 1354 million yuan respectively, with the corresponding growth rate of 90.43% / 21.81% / 15.67% respectively. The current market value is 10.7 billion, corresponding to PE of 11.17x/9.17x/7.93x from 2022 to 2024.
Risk tips
Raw material price fluctuation risk, exchange rate fluctuation risk, new energy vehicle demand is less than expected risk
