\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 078 Kidswant Children Products Co.Ltd(301078) )
Event:
The company issued the 2021 annual report and the first quarterly report of 2022.
Comments:
The revenue grew steadily in the past 21 years, and the performance was under pressure due to the disturbance of the epidemic
In 2021, the company achieved an operating revenue of 9.049 billion yuan, a year-on-year increase of 8.30%; The net profit attributable to the parent company was 202 million yuan, a year-on-year decrease of 48.44%; Net profit deducted from non parent company was 122 million yuan, a year-on-year decrease of 60.84%. The gross profit margin was 30.60%, with a year-on-year increase of 0.07pct. The company's sales / management / R & D / financial expense rates were 21.42% / 4.83% / 1.12% respectively, with a year-on-year increase of + 2.06 / + 0.21 / + 0.07 / + 1.01pct. The main reasons for the decline in performance include: 1) the implementation of the new lease standards, the new recognition of use right assets and lease liabilities, and then the new depreciation expenses and financial expenses; 2) New stores are in the climbing period, and the cost increases; 3) Repeated outbreaks in many places across the country have led to a decline in the sales revenue of single stores. In 2021, the average revenue of stores was 163606 million, and the flat efficiency revenue was 690577 yuan / square meter. The revenue of stores has declined, and the flat efficiency revenue has been flat in the past two years. In the fourth quarter alone, the company achieved an operating revenue of 2.452 billion yuan, a year-on-year decrease of 3.18%; The net profit attributable to the parent company is -351707 million yuan. In the first quarter of 2022, the company achieved an operating revenue of 2.109 billion yuan, a year-on-year decrease of 2.90%; The net profit attributable to the parent company was -324351 million yuan, from profit to loss.
The omni channel integration + digital strategy has been continuously promoted, and the refined operation has been deeply cultivated in the member economy
In terms of channels, the company continued to promote the establishment of offline stores. From 2018 to 2021, the company's net number of stores reached 45 / 94 / 82 / 71, and the number at the end of the period was 258 / 352 / 434 / 495. At the same time, we will promote the iterative upgrading of store functions and positioning, upgrade digital stores to the ninth generation, and improve store operation efficiency. Online resume omni-channel marketing network, combined with the store home business model to increase consumer contact. In 21 years, the online revenue was 841 million yuan, with a year-on-year increase of 12.06%. In addition, the company deepens the single customer economy, strengthens private domain operation, and provides a variety of personalized member services including childcare consultants to improve customer stickiness. By the end of 2021, the company had more than 50 million members, more than 11 million active users, nearly 10 million wechat private domain operating users and more than 760000 paying members.
Investment advice and profit forecast
As the leader of mother and baby retail, the company provides diversified one-stop services with stores as the carrier, improves customer retention, continues to promote omni-channel integration, strengthens supply chain management and expands brand advantages. Considering the impact of the epidemic in 22 years on offline business, we expect the company to realize operating revenue of RMB 9.548/11.60/12.802 billion, net profit attributable to parent company of RMB 230/4.89/604 million, EPS of RMB 0.21/0.45/0.56/share and PE of 64x / 30x / 24x respectively from 2022 to 2024, and give "overweight" rating.
Risk tips
The shop opening progress is not as expected; Online channel expansion is less than expected; Industry competition intensifies; The birth rate has fallen.
