\u3000\u3 China Vanke Co.Ltd(000002) 791 Guangdong Kinlong Hardware Products Co.Ltd(002791) )
Event: Guangdong Kinlong Hardware Products Co.Ltd(002791) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company realized an operating revenue of 8.807 billion yuan, 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%; The net profit attributable to the parent company after deduction was 881 million yuan, a year-on-year increase of 9.91%. In 2021q4, the company realized an operating revenue of 2.841 billion yuan, a year-on-year increase of 28.11%; The net profit attributable to the parent company was 185 million yuan, a year-on-year decrease of 41.49%; The net profit attributable to the parent company after deduction was 170 million yuan, a year-on-year decrease of 45.34%.
In addition, in 2022q1, the company achieved an operating revenue of 1.292 billion yuan, a year-on-year increase of 3.93%; Net profit attributable to parent company - 89 million yuan; Net profit attributable to the parent company after deduction of Non Profits - 93 million yuan.
We will continue to build a one-stop procurement model for multiple categories, and accelerate the volume of new categories
In terms of products, 1) in 21 years, the company's door and window hardware system realized an income of 4.175 billion yuan, with a year-on-year increase of 12.33%. The growth rate slowed down, mainly due to the "three red lines" regulation policy of real estate and the suspension of production caused by the spread of epidemic in many places, which had a certain impact on the traditional building accessories industry. 2) In the past 21 years, the company's revenue from other construction hardware products reached 1.76 billion yuan, a year-on-year increase of 86.86%. Focusing on the strategic positioning of integrated suppliers of building components and accessories, the company continues to give full play to the advantages of sales channels, expand new categories, and enter business fields such as security, underground comprehensive pipe gallery, natural fire smoke exhaust and intelligent ventilation window, labor safety protection products, fire and waterproof materials, electromechanical equipment and precision instruments, which can basically meet the one-stop procurement needs of various types of building hardware orders. 3) In 21 years, the company's household products achieved a revenue of 1.483 billion yuan, a year-on-year increase of 53.48%. The company increased investment in smart home, bathroom and hardbound room hardware products such as smart locks. Among them, the revenue of hybes intelligent lock was 460 million yuan, a year-on-year increase of 17.46%.
Vigorously expand the layout and sink the market, and make concerted efforts through channels outside China
The company actively promotes the construction of channel sinking, and has achieved full coverage of all prefecture level cities except Tibet, and some sales outlets cover multiple county-level cities or counties. By the end of 021, the company had more than 800 sales outlets outside China, with a year-on-year increase of about 200; The sales team has more than 6500 people, with a year-on-year increase of about 1500 people. In terms of international market expansion, the company actively develops the markets of emerging countries related to the "the Belt and Road". In recent years, the company has set up 12 overseas stock warehouses to copy Chinese warehouse sales overseas to quickly respond to customer supply needs. At present, the company has set up subsidiaries in India, Vietnam, Indonesia, Malaysia, Mexico and other countries, and connected with the same information system in China to accelerate the layout of the international market. Its products have been sold to more than 100 countries and regions.
The rise of raw materials put pressure on profits and maintained the overall stability of operating cash flow
In 21 years, the company's comprehensive gross profit margin was 35.24%, down 4.01pct year-on-year, mainly due to the rise in the price of raw materials. 22q1 company's comprehensive gross profit margin was 28.80%, down 7.43pct year-on-year. In terms of period expenses, the company's period expense rate in 21 years was 20.40%, a year-on-year decrease of 1.98pct, and the sales / management / R & D / financial expense rates were 12.58% / 4.11% / 3.52% / 0.19% respectively, with a year-on-year increase of - 1.22 / - 0.34 / - 0.45 / + 0.03pct respectively. The overall expense control was good, reducing the downward pressure on net interest rate. Under the comprehensive influence, the net interest rate of the company in 21 years was 10.93%, down 1.97pct year-on-year; 22q1's net profit margin was - 6.95%, down 10.99pct year-on-year. In terms of operating cash flow, the company achieved a net operating cash flow of 546 million yuan in 21 years, a year-on-year increase of 9.10%, and maintained a stable operating level through active control of payment collection risk.
Investment suggestion: as the leader of building hardware integration, the company has significant advantages in multi category products and scattered small B channels. Under the pressure of the real estate industry, the company has bucked the trend to expand personnel and iteratively upgrade the sales service mode. Its long-term growth is still worth looking forward to. We estimate that the operating revenue of Guangdong Kinlong Hardware Products Co.Ltd(002791) 2022-2024 will be 11.182, 15.138 and 19.765 billion yuan, with a year-on-year increase of 26.97%, 35.38% and 30.57%; The net profit attributable to the parent company was 1.021 billion yuan, 1.582 billion yuan and 2.147 billion yuan, with a year-on-year increase of 14.78%, 54.97% and 35.73%. The corresponding PE was 22.2x, 14.4x and 10.6x, and the investment rating of Buy-A was given.
Risk warning: the risk of sharp fluctuations in the price of raw materials; Market expansion is less than expected risk; Bad debt risk.
