\u3000\u3 China Vanke Co.Ltd(000002) 705 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) )
Events
The company issued the annual report of 2021 and the first quarter report of 2022. The total annual operating income of the company is 202195 billion yuan / + 1.21 billion yuan; Net profit attributable to parent company: 792 million yuan / – 29.15%; The net profit deducted from non parent company is 682 million yuan / – 26.77%; The basic earnings per share is 0.96 yuan / – 31.12%.
In the first quarter of 2022, the company achieved operating income of 3.642 billion yuan / + 13.46%, net profit attributable to parent company of 178 million yuan / + 4.60%, net profit not attributable to parent company of 152 million yuan / – 11.71%, and basic earnings per share of 0.22 yuan / + 6.07%.
Revenue slowdown and profit pressure: on the revenue side, the company achieved an operating revenue of 14.912 billion yuan in 2021, a year-on-year increase of 13.05%, a sharp decline of 31.52 percentage points compared with 44.57% in 2020. In 2022q1, the company achieved a revenue of 3.642 billion yuan, maintaining a low double-digit steady growth of 13.46% on the high base of 64.09% revenue growth in 2021q1. On the profit side, the total profit of the company in 2021 was 986 million yuan / – 28.23%, and the net profit attributable to the parent company was 792 million yuan / – 29.15%. The gross profit margin decreased from 23.31% in 2020 to 17.61%, which was caused by the repeated global epidemic, the rapid appreciation of the RMB against the US dollar in the early 2021 and the sharp rise in the price of bulk raw materials. The proportion of direct materials in the main business cost of the company reached 77.59% last year, an increase of 2.82 PCT year-on-year in 2020, and the profit of the company was under pressure. 22q1, due to the high cost of energy, transportation and materials caused by the international geopolitical conflict and the severe epidemic in China, the total profit of the company was 223 million yuan / – 1.68%, and the gross profit margin was 16.61%, 2.42 percentage points lower than that in the same period last year.
Foreign business grew rapidly, and kitchen electricity profits were greatly affected: regionally, China’s foreign revenue in 2021 reached 3.289 billion yuan / + 9.03% and 11.624 billion yuan / + 14.24% respectively. The export business developed rapidly. The year-on-year growth rate of China’s foreign revenue in 22q1 was 3% and 17%, and the export showed a further acceleration trend compared with the level in 2021. In terms of categories, in the kitchen electricity sector, the revenue of electric heating and electric appliances was 7.368 billion yuan and 3.496 billion yuan respectively in 2021, accounting for 49.41% / 23.44% of the total revenue, but their growth rate of + 8.76% / + 11.21% was less than the whole, which dragged down the revenue growth. The household sector accounted for 15.25% of the total revenue with 1.482 billion yuan, with a growth rate of 19.88% higher than the whole; The gross profit margins of electric heating, electric and household appliances were 16.81% / -6.24pct, 18.30% / -7.92pct and 16.87% / -4.21pct respectively. The gross profit level of electric appliances was the highest and declined the most.
Adhere to R & D, create innovative products and pay attention to improving management efficiency: on the one hand, the company adheres to R & D and innovation, focuses on exploring customer needs and pain points, creates products and finds new profit growth points. In recent years, R & D expenses have continued to increase, with R & D expenses of 394 million yuan / + 17.78%, 442 million yuan / + 12.26% and 108 million yuan / + 29.87% respectively in 2020, 2021 and 22q1. The net increase of R & D personnel in 2021 was 106 people / + 4.12%. On the other hand, it is proposed to improve management to enhance cost control ability and maintain advantages in complex and changeable situations. The company’s management expenses in 2020, 2021 and 22q1 are 701 million yuan / + 30.57%, 779 million yuan / + 11.23% and 169 million yuan / – 8.82% respectively. With the continuous growth of income scale, the expansion of management expenses has been well controlled and the management efficiency has been reflected.
Investment suggestion: Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) deeply cultivate the small household appliance industry, and produce and promote self branded products for well-known international brands for many years. At present, it has accumulated strong scale and management advantages in the international OEM industry, and has multiple brands with different positioning in China. In recent years, with the large single product model and excellent channel operation ability, it has continuously created popular models loved by young groups. We predict that the company’s earnings per share from 2022 to 2024 will be 1.17 yuan, 1.43 yuan and 1.66 yuan respectively, and PE will be 14.1 times, 11.6 times and 10.0 times in the next three years. It will be covered for the first time, and we give the suggestion of “increasing shareholding-a”.
Risk warning: market competition intensifies; The rise in raw material costs exceeded expectations; International trade frictions and blocked shipping, exchange rate risk; The acquisition of new products and new orders was less than expected.
