\u3000\u3 Shengda Resources Co.Ltd(000603) 833 Oppein Home Group Inc(603833) )
Performance review
On April 28, the company released the first quarterly report of 2022. In the first quarter, the company achieved a revenue of 4.14 billion yuan, a year-on-year increase of + 25.6%, and the net profit attributable to the parent / net profit deducted from non attributable to the parent increased by + 3.9% / + 12.0% to 250 / 230 million yuan respectively year-on-year. The revenue exceeded the expectation. In addition, the company’s contract liabilities and advance receipts performed well, with a total of 1.98 billion yuan at the end of Q1, a year-on-year increase of 39.3%, laying a good foundation for the company’s Q2 performance.
Business analysis
1q’s revenue exceeded expectations, and the retail channel showed its leading ability: from the perspective of sub channels, the company’s 1q distribution / direct sales / bulk revenue increased by + 34.1% / + 51.2% / – 7.0% year-on-year to RMB 3.22/1.2/670 billion respectively. Relying on the excellent expansion of packaging, bag carrying and other channels, the retail channel still increased further than 4q in 21 years under the influence of the epidemic in mid and late March, showing the strong share grabbing ability of the leader in the retail channel. In terms of products, the company’s 1q wardrobe / clothing (including supporting products) / bathroom / wood revenue is expected to be + 5.1% / + 40.9% / + 1.2% / + 32.3% to 13.2/23.2/1.7/220 million yuan respectively. If the contribution of supporting products is excluded, the growth of wardrobe category is expected to still exceed 30%. Compared with the end of last year, 1q of the company’s comprehensive wardrobe / independent wardrobe / bathroom / wooden door / opelli store was – 10 / – 58 / + 5 / + 1 / respectively. The channels were steadily optimized, and the continuous excellent growth of the same store reflects the company’s strong channel operation ability.
The rise in the price of raw materials lowered 1q gross profit margin and excellent cost control: the 1q gross profit margin of the company in 2022 was – 2.5pct to 27.7% year-on-year, mainly due to the rise in the price of raw materials and the slight increase in the price of the company’s products in Q3 last year. In terms of expense rate, the company’s expense rate during 1q in 2022 was – 1.5pct to 20.4% year-on-year. The scale effect of the company was further reflected, and the overall management and control was excellent. The 1q sales / Management (including R & D) / financial expense rate was – 0.6 / – 0.4 / – 0.5pct to 9.1% / 12.1% / – 0.8% year-on-year respectively.
Continuous innovation of business model, deep excavation of retail channels, and long-term growth can be expected: on the basis of significantly leading industries in informatization, product, production, channel management empowerment and other capabilities, the company has continuously innovated and iterated the channel business model, and deep excavation of retail channels. Recently, it has begun to pilot the establishment of a joint venture with dealers to jointly promote the new model of “customized decoration integration”, which is expected to further improve its ability to compete for traffic entrance, consolidate its channel control, boost the company to continuously increase its share and open a space for long-term growth.
Profit forecast and investment suggestions
We maintain the previous profit forecast. It is expected that the company’s EPS in 22-24 years will be 5.09 yuan / 6.07 yuan / 7.15 yuan respectively, and the current share price corresponding to PE in 22-24 years will be 22, 18 and 16 times respectively, maintaining the “buy” rating.
Risk tips
The expansion of the new model is not smooth; Intensified competition in packaging channels; The completion speed is lower than expected.
