\u3000\u3 China Vanke Co.Ltd(000002) 705 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) )
Key investment points
Performance summary: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 14.91 billion yuan, a year-on-year increase of 13%; The net profit attributable to the parent company was 790 million yuan, a year-on-year decrease of 29.2%; The net profit attributable to the parent company after non deduction was 680 million yuan, a year-on-year decrease of 26.8%. Q4 achieved a revenue of 4.21 billion yuan in a single quarter, a year-on-year increase of 3.3%; The net profit attributable to the parent company was 200 million yuan, a year-on-year decrease of 5.2%. In 2022q1, the company achieved a revenue of 3.64 billion yuan, a year-on-year increase of 13.5%; The net profit attributable to the parent company was 180 million yuan, a year-on-year increase of 4.6%. In addition, the company plans to pay a cash dividend of 0.2 yuan per share.
Domestic and foreign sales grew steadily. In terms of regions, overseas demand is strong, and foreign sales revenue increased by 14.2% year-on-year to 11.62 billion yuan; The Chinese market performed steadily, with sales revenue increasing by 9% year-on-year to 3.29 billion yuan. Among them, Mofei brand has successively launched new products such as the second generation of cutter chopping board disinfection machine, bubble juice machine and juice cup, upgraded multi-functional pot, wireless mite removal instrument and folding warm vegetable board. The diversified layout of products has been steadily promoted. The large volume of new products promoted the revenue performance of Mofei to be better than that of the industry. In 2021, Mofei achieved a revenue of 1.66 billion yuan, a year-on-year increase of about 10%. Dongling achieved a revenue of 240 million yuan, a year-on-year decrease of 21%.
Short term earnings are under pressure. In 2021, the company’s comprehensive gross profit margin was 17.6%, a year-on-year decrease of 5.7pp. The decline of the company’s gross profit margin is mainly due to the sharp fluctuation of exchange rate, the sharp increase of raw material prices and the rise of sea freight. In terms of expenses, the company’s sales expense rate / administrative expense rate / R & D expense rate / financial expense rate were 2.9% / 5.2% / 3% / 0.3% respectively. The administrative expense rate / R & D expense rate changed slightly, and the sales expense rate / financial expense rate decreased by 0.3pp/1.5pp year-on-year. Overall, the company’s net interest rate was 5.5%, a year-on-year decrease of 3.2pp.
Q1 revenue continued to grow and profits improved month on month. Under last year’s high base, the company’s export sales still achieved rapid growth, Q1 revenue increased by about 17% year-on-year, and the export operation is full of resilience; In terms of domestic sales, due to the repeated impact of the epidemic in China, the logistics distribution is limited, the growth rate of domestic sales slows down, and the growth rate of domestic sales in Q1 is about 3%. In terms of profitability, the gross profit margin of 2022q1 company was 16.6%, a year-on-year decrease of 2.4pp, and the decline of gross profit margin narrowed month on month; The net interest rate was 5.1%, a year-on-year decrease of 0.5pp and a month on month increase of 0.1pp. We believe that the company’s export price adjustment has gradually achieved results, the domestic product structure has been optimized, and the company’s profitability has been steadily improved.
Profit forecast and investment suggestions. As the leading manufacturer of small household appliances, the company’s export price adjustment is progressing smoothly and waits for profit improvement; New products for domestic sales are gradually developing. With the improvement of the epidemic situation and the easing of logistics, domestic sales are expected to grow steadily. The company’s EPS is expected to be 1.13/1.37/1.64 yuan from 2022 to 2024, maintaining the “buy” rating.
Risk tips: the price of raw materials may fluctuate sharply, the RMB exchange rate may fluctuate sharply, and the terminal sales may be less than expected.
