\u3000\u3 China Vanke Co.Ltd(000002) 154 Baoxiniao Holding Co.Ltd(002154) )
Event overview
22q1 company’s income / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were 11.57/2.06/167 million yuan respectively, with a year-on-year increase of 16% / 14% / 7%. Non economic benefits were mainly government subsidies of 52 million yuan and income tax impact of – 13 million yuan. The performance exceeded expectations. Our analysis was mainly due to: (1) the main brands and hazys joined and maintained rapid growth online; (2) BAONIAO’s orders were good and the growth exceeded expectations; (3) Excluding the contribution of government subsidies, it is estimated that the net profit will still increase by 2%, which is not easy under the background of the epidemic and the high base of 21q1 net interest rate.
Analysis and judgment:
Revenue maintained rapid growth, mainly from franchising and online contribution. In terms of splitting, we estimate that the main brand and hazzys maintain double-digit growth, and the main brand is faster than hazzys, mainly because hazzys is mainly directly operated and concentrated in the first and second tier cities, which are more affected by the epidemic; BAONIAO estimated that its revenue increased by more than 30%, mainly benefiting from the trend of centralized purchase in the industry and better orders. From the perspective of further sub channels, we estimate that the main brand is flat with the direct sales of hazzys (mainly due to the impact of the epidemic in late March), the growth of franchise is close to 30%, and the growth of e-commerce is more than 30%.
The net interest rate is deducted from the high base, and the non net interest rate decreases slightly. The gross profit margin of 22q1 was 65.7%, a year-on-year decrease of 1.4pct. Our analysis is mainly due to the high discount rate of 21q1 against the background of shortage, resulting in a high base. 22q1 net profit margin was 17.8%, down 0.4pct year-on-year, deducting non net profit margin was 14.4%, down 1.2pct year-on-year. The decline of deducting non net profit margin was mainly due to the decline of gross profit margin, and the expense rate was relatively stable (expense rate during the period + 0.5pct to 45.6%). The decrease in net profit attributable to the parent company was lower than that in gross profit margin, which was mainly contributed by other income (government subsidies), with 22q1 government subsidies of 52 million yuan.
Inventory improved and operating cash flow was negative, mainly due to the payment of taxes and excess bonuses. The operating cash flow is -93 million yuan. According to our analysis, it is mainly due to the payment of taxes and employee compensation, which is the excess bonus of last year. Q1 inventory was 1.088 billion yuan, down 5% month on month.
Investment advice
According to our analysis, (1) the company has a one-time expense impact in 21 years; (2) The impact of the epidemic is a short-term factor. The Growth Logic of the company remains unchanged in three years and is expected to accelerate the opening of stores in 22 years. In particular, there is still room for the franchise end of hazys to open stores, but it is not obvious in 21 years. However, with the improvement of the success rate of opening stores and the reduction of closing stores, we judge that there are about 80 main brands and hazys to open stores respectively in 22 years. Considering the corresponding extension growth of 10-15% / 15-20% after closing stores; (3) Maintaining the main brand in the medium and long term / hazys is expected to achieve a revenue of 3 / 5 billion yuan; (3) In the long run, the company has also learned from the experience of South Korean commodity planning in the process of acting for hazys. It is expected to grow into a multi brand operation group in the future. It is not excluded that there are still new brands to become the growth point in addition to hazys, and lefeiye and kemiche are expected to become the next growth point.
Although Q1 exceeded expectations, considering the impact of Q2 epidemic and maintaining the profit forecast, it is expected that the revenue in 22 / 23 / 24 will be RMB 5.03/59.4/6.89 billion, the net profit attributable to parent company in 22 / 23 / 24 will be RMB 569 / 697 / 820 million, the corresponding EPS in 22 / 23 / 24 will be RMB 0.39/0.48/0.56, the share price on April 29, 2022 will be RMB 3.77, and the corresponding PE will be 10 / 8 / 7X respectively. At present, the valuation is at the bottom, maintaining the buy rating, The fixed increase cost of major shareholders is 3.07 yuan, providing a relative margin of safety.
Risk tips
Uncertainty of epidemic development, lower than expected progress of store opening, systemic risk
