\u3000\u3 China Vanke Co.Ltd(000002) 705 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) )
Event:
On April 27, 2022, Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 14.912 billion yuan (+ 13.05%), and a net profit attributable to the parent company of 792 million yuan (- 29.15%); In 2021q4, the revenue was 4.209 billion yuan (+ 3.26%), and the net profit attributable to the parent company was 198 million yuan (- 5.24%); In 2022q1, the operating revenue was 3.642 billion yuan (+ 13.46%), and the net profit attributable to the parent company was 178 million yuan (+ 4.60%).
In 2022q1, the high growth of export sales drove the growth of revenue, and the domestic sales revenue increased steadily. 1) Quarter by quarter: the operating revenue of 2021q4 is 4.209 billion yuan (+ 3.26%), with steady growth under the high base; In 2022q1, the operating revenue was 3.642 billion yuan (+ 13.46%), mainly driven by export sales, and the growth rate increased month on month; 2) In terms of regions, the export revenue in 2021 was 11.624 billion yuan (+ 14.24%), and the same ratio in 2022q1 was about + 17%. Although the instability of the international environment increased, the improvement of the company’s business quality increased significantly; The domestic sales revenue in 2021 was 3.289 billion yuan (+ 9.03%), and the same ratio in 2022q1 was about + 3%. The growth rate slowed down or the epidemic situation in China repeatedly affected the logistics, and we look forward to a large amount after the epidemic situation eased; 3) By category: in 2021, the income of electric kitchen appliances was 7.368 billion yuan (+ 8.76%), accounting for 49.41%; The income of electric kitchen appliances was 3.496 billion yuan (+ 11.21%), accounting for 23.44%; The income of household appliances was 2.274 billion yuan (+ 19.88%), accounting for 15.25%.
The profitability of 2021q4 has been repaired, 2022q1 is under short-term pressure, and the cost side is well controlled. 1) Gross profit margin: 2021q4 gross profit margin 17.79% (+ 0.46pct), mainly through new product research and development, production efficiency improvement, strategic procurement arrangements and other measures to digest the rising pressure of costs, and the results of product price adjustment appear; The gross profit margin of 2021q1 is 16.61% (- 2.42pct), which is mainly due to the increase in the proportion of export business with lower gross profit margin, superimposed with the impact of the continuous rise of raw material prices; 2) Net interest rate: the net interest rate of 2021q4 / 2022q1 was 4.98% / 5.13%, with a year-on-year increase of -0.39 / -0.51pct and a month on month increase of 0.15pct in 2022q1; 3) Expense side: 2021q4 sales / management / R & D / financial expense ratio is 2.90% / 5.71% / 3.31% / 0.92%, year-on-year + 3.74 / – 0.95 / – 0.18 / – 2.70pct; In 2022q1, the sales / management / R & D / financial expense ratio was 2.66% / 4.65% / 2.96% / 0.22%, with a year-on-year increase of -0.68 / – 1.14 / + 0.37 / + 0.29pct. The increase in the financial expense ratio was mainly due to the fluctuation of the exchange rate of RMB against the US dollar, the increase in exchange losses, and the overall cost side was well controlled.
Fast paced New + new traffic operation, and the growth of Mofei brand is strong. 1) Product end: in 2021, Mofei brand launched new products such as the second generation of cutter chopping board disinfector, bubble juice machine and juice cup, upgraded multi-functional pot, wireless mite remover and folding warm vegetable board, with a main revenue of about 1.66 billion yuan (+ 10%); 2) Marketing side: strengthen the content and grass planting. In September, 2021, we launched the brand customized Mini drama “our secret gathering” on the Tiktok platform. As of April 28, 2022, we have gained 17000 + fans and 70000 + likes. Innovative marketing has improved brand awareness.
Export sales drive revenue growth, cost side control is good, Mofei brand gives full play to its vitality, covers for the first time, and gives a “buy” rating. As a leading enterprise of small household appliances, the company has strong operation ability. Facing the uncertainty of the external environment, the revenue of 2022q1 still achieved rapid growth. The product strength of Mofei brand has been continuously improved, and the innovative marketing advantages will continue to be brought into play, which is expected to boost the domestic sales revenue for a long time. For the first time, give a “buy” rating. We predict that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.047/12.32/1.307 billion, corresponding to EPS of RMB 1.27/1.49/1.58, and the current share price corresponding to PE of RMB 11.84/10.06/9.48.
Risk tips: China’s market demand is declining, market competition is intensifying, exchange rate fluctuations, price fluctuations of main raw materials, and the expansion of new categories is less than expected.
