\u3000\u3 Shengda Resources Co.Ltd(000603) 833 Oppein Home Group Inc(603833) )
The company released the first quarter report of 2022: 22q1 achieved an operating revenue of 4.144 billion yuan (year-on-year + 25.60%), a net profit attributable to the parent of 253 million yuan (year-on-year + 3.88%), and a net profit not attributable to the parent of 234 million yuan (year-on-year + 11.99%). Under the epidemic, the growth of income and deduction of Non Profits exceeded expectations, showing the resilience of the leader. The low growth of return to parent profits was mainly due to the year-on-year decrease of about 20 million yuan in government subsidies + investment income of financial products.
Retail broke the ice against the trend and industry integration accelerated. The company’s retail channel 22q1 achieved a revenue of 3.346 billion yuan (year-on-year + 34.66%) and a gross profit margin of 27.82% (year-on-year -2.04pct), mainly due to the integrated development of the company’s large home, the steady growth of kitchen cabinets, the rapid growth of wardrobe, accessories and wooden doors, and the prominent ability of industry integration. As of 22q1, the total number of stores was 7398 (from the beginning of the year – 77), and there were 974 opelli stores (from the beginning of the year – 15).
1) wardrobe and accessories: in 22q1, the revenue was 2.320 billion yuan (year-on-year + 40.85%), and the gross profit margin was 28.58% (year-on-year -2.35pct), which was mainly due to the company’s launch of cost-effective whole house package, and the proportion of accessories increased rapidly. As of 22q1, there were 2143 European style wardrobe (wardrobe independent) stores (compared with – 58 at the beginning of the year), and the gross profit margin was slightly under pressure, mainly due to the low gross profit margin of accessories.
2) kitchen cabinets: in 22q1, the revenue was 1.324 billion yuan (year-on-year + 5.13%), and the gross profit margin was 30.46% (year-on-year -1.21pct), which was mainly due to the diversified layout of the company’s packaging and distribution and the strengthening of channel empowerment. As of 22q1, there were 2449 European style kitchen cabinets (including kitchen clothes) stores (from the beginning of the year to 10).
3) wooden doors: in 22q1, the revenue was 218 million yuan (year-on-year + 32.29%), and the gross profit margin was 10.08% (year-on-year -1.46pct), which was mainly due to the strengthened category integration of oppeni wooden doors, the effect of M6 profit model was prominent, and the customer unit value was significantly improved. As of 22q1, there were 1022 oppeni wooden door stores (compared with the beginning of the year + 1).
4) sanitary ware: in 22q1, the revenue was 167 million yuan (year-on-year + 1.19%), the gross profit margin was 20.35% (year-on-year -1.40pct), and the growth was driven by the whole packaging & bulk channels. As of 22q1, there were 810 European style sanitary ware stores (compared with the beginning of the year + 5). The bulk commodities kept improving while maintaining stability, and the overall packaging continued to increase at a high rate. 1) Bulk: in 22q1, the revenue was 673 million yuan (year-on-year – 6.98%), and the gross profit margin was 27.14% (year-on-year – 3.09pct). The company strictly controls risks, strives for progress while maintaining stability, cooperates with high-quality strategic customers to carry out a number of parts and supporting items, infiltrates the loading business after hardbound, and transforms from a hardbound material supplier to a whole hardbound service provider. 2) Decoration: in 2021, the number of orders received exceeded 90% year-on-year. At the same time, star home decoration was launched to focus on the sinking market, and an ecological decoration platform integrating mainstream building materials, home furnishings, home decoration and decoration design was built in collaboration with europaladi.
The profit is slightly under pressure and the expense control is excellent. The gross profit margin of 22q1 was 27.66% (YoY -2.54pct), the net profit attributable to the parent company was 6.11% (YoY -1.28pct), the period expense rate was 20.41% (YoY -1.52pct), of which the sales expense rate was 9.13% (YoY -0.56pct), the management expense rate was 7.12% (yoy -0.30pct), the financial expense rate was -0.78% (YoY -0.53pct), and the R & D expense rate was 4.94% (YoY -0.14pct), The gross profit margin decreased slightly, mainly due to the rapid growth of supporting products, which lowered the overall gross profit margin. In addition, dealers’ subsidies and rebates were increased during 315. The epidemic hindered logistics and reduced operation capacity. 22q1 net operating cash flow was -324 million yuan (year-on-year -99 million yuan), mainly due to the increase in raw material preparation. In terms of operating efficiency, by the end of 2021, accounts receivable and bills had reached 1.208 billion yuan (year-on-year + 39.79%), turnover days 21.88 days (year-on-year + 5.39 days), inventories 1.265 billion yuan (year-on-year + 44.36%), turnover days 40.95 days (year-on-year + 8.03 days), and the epidemic hindered product delivery.
Investment suggestion: the company breaks the ice against the trend, accelerates industry integration and has strong alpha attribute. We expect the net profit attributable to the parent company in 202224 to be RMB 3.04/35.6/4.13 billion, with a year-on-year increase of 14.2% / 17.1% / 16.0%, corresponding to PE of 22.5x/19.1x/16.5x, maintaining the “buy” rating.
Risk tip: repeated outbreaks and unexpected decline in real estate.
