\u3000\u3 China Vanke Co.Ltd(000002) 791 Guangdong Kinlong Hardware Products Co.Ltd(002791) )
Key investment points
Event: the company released the 2021 annual report and the first quarterly report of 2022, with a revenue of 8.807 billion yuan in 2021, a year-on-year increase of + 30.72%; The net profit attributable to the parent company was 889 million yuan, a year-on-year increase of + 8.83%; Deduct non net profit of 881 million yuan, a year-on-year increase of + 9.91%. Q1 revenue in 2022 was 1.292 billion yuan, a year-on-year increase of + 3.93%; The net profit attributable to the parent company was -89 million yuan, a year-on-year increase of -309.57%; Deduct non net profit of -93 million yuan, a year-on-year increase of -338.13%.
Affected by the real estate, the growth rate of door and window hardware has slowed down, the household income has maintained rapid growth, and the income of other construction hardware products has increased significantly. In 2021, the company's door and window hardware business revenue was 4.175 billion yuan, a year-on-year increase of + 12.33%. Due to the tight financing end of real estate developers and insufficient cash flow, the company actively controlled the risk of accounts receivable, and the growth rate of door and window hardware business slowed down. In 2021, the income of household business was 1.483 billion yuan, with a year-on-year increase of 53.48%. Among them, the income of hybes intelligent lock was 460 million yuan, with a year-on-year increase of 17.46%, the net profit was 91 million yuan, with a year-on-year increase of 51.20%, and the net interest rate was 19.83%. With the gradual improvement of scale effect, channel advantage and product integration advantage, the revenue of other building hardware products was 1.76 billion yuan, with a year-on-year increase of 86.86%, accounting for 19.99% of the revenue, with a year-on-year increase of 6pct, which has maintained a rapid growth in recent years, The one-stop procurement mode is becoming more and more popular; The gross profit margins of door and window hardware system, other building hardware products and household products were 40.57%, 23.14% and 35.97% respectively, with a year-on-year increase of -3.40pct, -6.93pct and 1.17pct.
The short-term profit was greatly affected by the rise of raw materials, and the net interest rate decreased in the first quarter of 2022. In 2022q1, the operating revenue was 1.292 billion yuan, a year-on-year increase of 3.93%; The net profit attributable to the parent company was -89 million yuan, with a year-on-year increase of -309.57%, mainly because the prices of zinc and aluminum alloys rose sharply in the first quarter. The main materials required for the production and operation of the company are stainless steel, aluminum alloy, zinc alloy and spare parts. The company's spare parts materials are mainly composed of stainless steel, aluminum alloy and zinc alloy. In recent three years, aluminum alloy, zinc alloy and spare parts account for about 65% - 70% of the company's production cost. The rise in the prices of stainless steel, aluminum alloy and zinc alloy has compressed the company's profit space.
The decrease in gross profit margin was mainly due to the rise in the price of raw materials, which played a significant role in cost control during the period. In 2021, the company's comprehensive gross profit margin was 35.24%, with a year-on-year increase of -4.01pct. From a quarterly perspective, the company's Q1, Q2, Q3 and Q4 achieved gross profit margins of 36.23%, 37.93%, 35.90% and 32.11% respectively, with a year-on-year increase of -3.10, -6.11, -6.47 and -0.53 percentage points; During 2021, the expense rate was 20.40%, year-on-year -1.98pct, and the sales expense rate was 12.58%, year-on-year -1.22pct; The management expense ratio was 4.11%, with a year-on-year increase of -0.34pct; The financial expense ratio was 0.18%, year-on-year + 0.03pct, and the financial expense was 164166 million yuan, a year-on-year increase of 57.56%.
Direct sales channels have been continuously developed, product categories have been continuously expanded, overseas markets have been continuously developed, and three-wheel drive has supported performance growth. By the end of 2021, the company has more than 800 sales outlets and more than 6500 sales teams. The company will continue to make efforts to the county market in the future; The company continues to layout the smart home, security market and building energy-saving fields, and the supporting facilities such as door, window and curtain wall hardware, door control hardware system and stainless steel guardrail components and accessories of traditional buildings continue to be improved; The company actively develops markets in emerging countries and sets up subsidiaries in India, Vietnam, Indonesia, Malaysia, Mexico and other countries. 13 overseas stock warehouses have been established, with customers from more than 100 countries and regions. The continuous expansion of overseas market is expected to bring performance growth to the company.
Profit forecast and investment suggestions: it is estimated that the company will realize an operating revenue of 11.23/14.15/17.72 billion yuan from 2022 to 2024, a year-on-year increase of + 27.5% / 26.0% / 25.2%; The net profit attributable to the parent company is expected to be 1.07/13.7/1.69 billion yuan, a year-on-year increase of 19.9% / 28.6% / 23.3%; EPS is expected to be 3.32/4.27/5.26 yuan respectively, and the corresponding PE valuation is 23.4x/18.2x/14.8x respectively, maintaining the "buy" rating.
Risk tips: the price of raw materials rises sharply, the real estate policy continues to tighten, and the risk of accounts receivable collection.
