\u3000\u3000 Midea Group Co.Ltd(000333) Midea Group Co.Ltd(000333) )
Event: Midea Group Co.Ltd(000333) released the annual report of 2021 and the first quarterly report of 2022. The company achieved a revenue of 343.36 billion yuan in 2021, yoy + 20.2%; Achieved a performance of 28.57 billion yuan, yoy + 5.0%. Converted Q4 single quarter revenue of 80.42 billion yuan, yoy + 18.3%; The performance was 5.12 billion yuan, yoy-1.7%. In 2022q1, the company achieved revenue of 90.94 billion yuan, yoy + 9.5%; Achieved a performance of 7.18 billion yuan, yoy + 11.0%. The operating performance of the company in 2022q1 meets the expectations of the capital market. We believe that in 2022q1, the revenue and performance of Midea grow steadily, which is particularly rare in the business environment with high external pressure.
Steady growth of Q1 company’s revenue: Q1 company’s sales performance in various categories: 1) combined with industry online data, it is estimated that the overall revenue growth of Q1 HVAC business is more than 10%. Due to cost pressure, Midea has adjusted the domestic and export prices of air conditioners. 2) In Q1, the income of consumer electrical appliances increased steadily, among which the income of refrigerators increased rapidly (benefiting from the epidemic), and the income of small household appliances increased slightly. On the whole, the sales performance of household appliances of Q1 company is good, reflecting strong competitiveness, while the future sales trend of small household appliances needs to be tracked. From the perspective of end B and end C, combined with the industry trend, we judge that the revenue growth of end B of Q1 company is faster than that of end C; In the b-end business, the growth rate of building technology business is in the leading position, reflecting the rapid development of the company’s commercial central air conditioning business and the increase of market share. We believe that Midea has enough time to reserve and try in the b-end business field, and can give full play to its own scale and supply chain advantages (see the in-depth report Midea Group Co.Ltd(000333) : leading management mechanism and leading vitality).
Q1 net profit margin increased slightly: the company’s 2022q1 single quarter net profit margin was 8.0%, year-on-year + 0.04pct. Under the condition of significant cost increase, Midea’s profitability improved mainly because: 1) the company hedged some negative effects through price adjustment. The difference between Q1 gross profit margin and sales expense rate decreased slightly by 0.2pct year-on-year. 2) The company controls the cost input, and the Q1 management expense rate is -0.3pct year-on-year. 3) The loss from changes in fair value of financial assets decreased year-on-year. In the long run, the company will improve its operating conditions by adjusting prices, optimizing product structure and improving operational efficiency, and its profitability is expected to be repaired in the future.
KUKA’s operation in 2022q1 is better: according to KUKA’s first quarterly report, KUKA’s revenue in 2022q1 is yoy + 18.3%; Affected by the cost, the gross profit margin in a single quarter was -1.3pct year-on-year; Due to the impairment reversal of accounts receivable and other factors, the after tax profit was 18.1 million euros, yoy + 174.3%. KUKA’s operation improved in 2022q1, and its revenue and performance improved year-on-year. From the situation of receiving orders, the company has full orders on hand, and the future growth can be expected. According to the announcement, the order receiving volume of Q1 KUKA is yoy + 42.0%. It is worth mentioning that KUKA’s business performance in China exceeded expectations. Q1 China orders yoy + 97.5% (growth from Siasun Robot&Automation Co.Ltd(300024) , system integration business), revenue yoy + 61.2%, EBIT of 4.3 million euros (EBIT of – 1.8 million euros in the same period of last year). In the long run, we are optimistic about the development prospect of Siasun Robot&Automation Co.Ltd(300024) industry and look forward to KUKA’s rapid growth in the Chinese market.
Proposed incentive plan: according to the announcement, Midea plans to carry out the ninth stock option incentive plan (the shares to be granted account for 1.56% of the total share capital), the 2022 restricted stock incentive plan (the shares to be granted account for 0.18% of the total share capital), the eighth global partner shareholding plan (with a special fund of 210 million yuan for incentive) and the fifth business partner shareholding plan (with a special fund of 160 million yuan), Bind the interests of core executives and business backbones. We believe that the long-term incentive plan is the cornerstone of Midea’s rapid development, and we are optimistic about the development prospect of the company.
Investment suggestion: the mechanism of diversified business layout and rapid response to market changes is the advantage of the company to maintain its pressure resistance, and will also be the basis for the company to continuously surpass the market performance in the future. We expect the company’s EPS to be 4.50/5.39 yuan from 2022 to 2023, maintain the investment rating of Buy-A, and the six-month target price is 67.50 yuan, corresponding to a dynamic P / E ratio of 15 times in 2022.
Risk tip: the uncertainty of overseas epidemic situation and the risk of sharp fluctuation of real estate boom.
