\u3000\u3 Shengda Resources Co.Ltd(000603) 833 Oppein Home Group Inc(603833) )
Event: the company released the first quarter report of 2022. In the first quarter of 2022, the operating revenue was 4.144 billion yuan, an increase of 25.60% year-on-year; The net profit attributable to the parent company was 253 million yuan, a year-on-year increase of 3.88%; The non net profit deducted was 234 million yuan, an increase of 11.99% year-on-year; Net operating cash flow was – 324 million yuan, a year-on-year decrease of 44.30%, and the overall income growth exceeded market expectations.
Pursue the revenue priority strategy and continuously improve the operation efficiency. In the first quarter, the company’s gross profit margin was 27.66% (-2.53pct.), Net profit margin on sales is 6.08% (-1.31pct.), Compared with the same period last year, it decreased slightly, mainly due to the continuous increase of raw material costs and the implementation of dealer assistance measures by the company. On the expense side, the sales expense rate of 22q1 company is 9.13% (- 0.55pct.), The management fee rate is 7.12% (- 0.30pct.); The financial expense rate is -0.78% (-0.52pct.), The R & D expense rate is 4.94% (- 0.14pct.), Continue to reduce costs and increase efficiency.
Retail channels grew strongly and made a good start. In terms of channels, 1) bulk channels: the revenue in the first quarter was 673 million yuan, down 6.98% year-on-year, and the gross profit margin was 27.14% (- 3.09pct.). Considering the real estate environment and risk control, the growth rate of bulk channels turned negative in a single quarter. 2) Retail channels: the revenue in the first quarter was 3.397 billion yuan (including exports), with a year-on-year increase of 33.74%, showing a strong performance. Among them, the direct channel revenue was 123 million yuan, with a year-on-year increase of 51.15% and a gross profit margin of 58.12% (- 2.03pct.); The distribution channel revenue was 3.223 billion yuan, with a year-on-year increase of 34.10% and a gross profit margin of 26.66% (- 2.17 PCT.). We expect the revenue of the packaged business to increase by more than 70% in the first quarter. Excluding the increment of the packaged business, the traditional retail business still increased by nearly 30% and made a good start.
Category: the whole decoration and customization drive the growth of the whole category, and the cabinet business is not afraid of bulk channel adjustment. By category, 1) kitchen cabinet: the revenue in the first quarter was 1.324 billion yuan, with a year-on-year increase of 5.13% and a gross profit margin of 30.46%. Affected by the adjustment of bulk channels, the growth of kitchen cabinet business slowed down, but still maintained positive growth. 2) Wardrobe and accessories: in the first quarter, the revenue was 2.320 billion yuan, an increase of 40.85% year-on-year, and the growth was accelerated month on month compared with Q4, with a gross profit margin of 28.58%. 3) Bathroom: the revenue in the first quarter was 167 million yuan, a year-on-year increase of 1.19%. 4) Wooden door: the revenue in the first quarter was 218 million yuan, a year-on-year increase of 32.29%. The whole decoration and whole family customization strategy drive the coordinated growth of multiple categories.
Channel: stores fluctuate in the short term and continue to optimize investment promotion. By the end of the reporting period, the enterprise had a total of 7398 stores (- 77), including 1022 oppeni doors (+ 1), 810 Oppai sanitary ware (+ 5), and the net closing of oppeni, Oppai wardrobe and Oppai cabinet compared with the end of last year. The change of stores is related to the adjustment of dealers’ business plans, the optimization of investment promotion and the change of distribution management policies, and has the characteristics of short-term fluctuation.
The feedback of the integrated joint venture mode is good, emphasizing the dominance of the flow inlet. In 2018, the company took the lead in expanding the decoration channel in the industry, cooperated with head decoration enterprises and occupied the front-end channel. In 2021, the company launched the whole customized brand “Star House” and the material supply platform “oupai excellent material”, realizing the integrated marketing from single product to platform, driving the rapid growth of main and auxiliary material categories. In 2022, the company explored the new mode of “integration of customized decoration” in the whole decoration joint venture, stimulated the vitality of channels internally and strengthened the European brand effect and traffic dominance externally. Under the advantage of drainage, the company’s decoration channels continued to iterate, deepened the moat of retail channels, and gradually launched the platform logic of home decoration integration.
Investment suggestion: the company has outstanding advantages in product power, channel power and brand power, the big home strategy is stable and Zhiyuan, and the leading position is stable. We estimate that from 2022 to 2024, the company will achieve operating revenue of RMB 24.3 billion, 28.5 billion and 33.3 billion, with a year-on-year increase of 18.9%, 17.4% and 16.6%, and the net profit attributable to the parent company of RMB 3.19 billion, 3.79 billion and 4.43 billion, with a year-on-year increase of 19.5%, 18.8% and 17.1%, corresponding to EPS of RMB 5.23, 6.21 and 7.27, maintaining the “buy” rating.
Risk tips: the risk of substantial fluctuations in the price of raw materials, the risk of intensified market competition, dealer management risk, etc.
