\u3000\u3 China Vanke Co.Ltd(000002) 959 Bear Electric Appliance Co.Ltd(002959) )
Event: Bear Electric Appliance Co.Ltd(002959) released the first quarterly report of 2022. In 2022q1, the company achieved revenue of 980 million yuan, yoy + 7.7%; The performance was 100 million yuan, yoy + 15.9%. Looking forward to the follow-up, we believe that as the company continues to expand new categories, actively embrace emerging channels and continue to explore overseas markets, the revenue is expected to grow steadily.
Q1’s revenue grew steadily in the single quarter: in 2022q1, the revenue of little bear was yoy + 7.7%, and the growth rate increased by 0.9pct month on month. From January to February, the sales of small household appliances in Xiaoxiong kitchen increased steadily. According to the business consultant data, from January to February, the sales of small household appliances in the kitchen of Xiaoxiong on Taoxi platform were yoy + 6.1%. In March, the epidemic situation in many places in China was repeated, and the delivery of Xiaoxiong logistics was affected. We judged that there was a certain pressure on the sales of small kitchen appliances. According to the business consultant, in March, Xiaoxiong’s sales of small household appliances in the kitchen of Amoy platform were yoy-10.5%. Overall, the sales of small household appliances in the kitchen of Q1 Xiaoxiong Amoy platform is yoy-0.1%. Q1 Xiaoxiong’s income from personal care and small household appliances continued to grow at a high speed. Q1 Xiaoxiong’s sales of personal care small appliances on Taoxi platform were yoy + 237.3%. The company is actively expanding new e-commerce channels such as Tiktok and Kwai, and the revenue of Tiktok channel of Q1 company maintains rapid growth.
The gross profit margin of Q1 increased year-on-year: the gross profit margin of Q1 company was 37.2%, year-on-year + 1.6pct. Wind data shows that during 2022q1, Shanghai copper index, Shanghai aluminum index and plastic index yoy + 13.9% / 37.5% / + 1.0%. Although the cost of Q1 raw materials is still under pressure, the company’s gross profit margin has increased year-on-year. We believe that the main reasons are as follows: 1) the proportion of self operated sales with high gross profit margin has continued to increase, driving the overall gross profit margin of the company; 2) The company continues to upgrade production hardware and improve lean manufacturing capacity, effectively improve manufacturing efficiency and control production costs.
Q1 profitability increased year-on-year: the net interest rate of Q1 company was 10.7%, year-on-year + 0.8pct. The year-on-year increase of Q1 company’s net profit margin is less than that of gross profit margin. We believe that the reasons are as follows: 1) with the increase of the company’s self operated proportion, the sales expenses increase accordingly. Q1 sales expense ratio + 1.8pct year on year; 2) Interest expense increased year-on-year, Q1 financial expense + 0.4pct year-on-year; 3) The investment income of corporate financial management decreased, and the proportion of net investment income in Q1 in income was -0.4pct year-on-year.
The net operating cash flow in Q1 increased year-on-year: the net operating cash flow of the company in Q1 increased by 180 million yuan year-on-year, mainly due to 1) the steady growth of the company’s sales revenue and the recovery of some receivables. The accounts receivable of Q1 company were – 20 million yuan year-on-year. 2) All taxes paid by Q1 company were – 30 million yuan year-on-year.
Investment suggestion: Xiaoxiong is a leading online small household appliance company, occupying the head share in many long tail markets. Affected by the high base of the epidemic and the sharp rise in the price of raw materials, the company’s performance is under pressure in the short term. In the long run, the company’s product structure is continuously optimized and will continue to benefit from the online dividends of small household appliances. With the recovery of consumer demand in the small household appliance industry and the gradual return of raw material prices to normal levels, the company’s performance is expected to resume rapid growth. We expect the company’s EPS from 2022 to 2024 to be 2.16/2.65/3.12 yuan respectively, maintaining the Buy-A investment rating.
Risk tip: the price of raw materials has risen sharply and the industry competition has intensified.
