\u3000\u3 Shengda Resources Co.Ltd(000603) 908 Comefly Outdoor Co.Ltd(603908) )
Event overview
22q1 company’s revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were RMB 327 / 0.37/0.32 billion respectively, with a year-on-year increase of 56% / 73% / 77%. The non economic benefits were mainly government subsidies of RMB 2.81 million and investment income of RMB 2.31 million. The performance exceeded expectations. Our analysis was mainly due to the higher than expected growth of income under export and Damu line. The company’s controlling shareholder, the person acting in concert and Dong Jiangao disclosed the announcement of planned reduction of holdings, and proposed to reduce the total holdings of no more than 4.7684% shares, of which the controlling shareholder Damu investment plans to reduce the holdings of no more than 200700 shares, accounting for 3%, Zhejiang Jiatuo, the person acting in concert of the controlling shareholder, plans to reduce the holdings of no more than 1087000 shares, accounting for 1.63%, and Dong Jiangao plans to reduce the total holdings of no more than 92300 shares.
Analysis and judgment:
The higher than expected income mainly comes from export and the lower than expected income of Damu line. 22q1 export / brand business revenue was RMB 234 million / 93 million respectively, with a year-on-year increase of 44% / 98%. Export business accelerated growth, mainly due to higher than expected orders in overseas peak seasons. In terms of brand business splitting, Damu increased by 186%, of which the income of Damu online / Damu group purchase was RMB 0.3/45 billion respectively, an increase of 119% / 253%; Xiaomu decreased by 10%, of which the revenue of Xiaomu direct marketing / Xiaomu franchise was 06 / 12 million yuan respectively, with a year-on-year increase of 10% / – 19%. Damu continued to perform beautifully, with not only a continuous high increase online, but also an accelerated growth of offline group purchase. The decline of Xiaomu franchise income is mainly due to the impact of the epidemic, and the ordering will be carried out.
The increase in freight and raw material prices led to a decline in the gross profit margin of export business and continued to increase the gross profit margin of brand business. The gross profit margin of 22q1 was 25.5%, with a year-on-year decrease of 0.4pct. The decrease in gross profit margin was mainly due to the decline in export gross profit margin caused by the rise in freight and raw material prices. The gross profit margin of 22q1 export / brand business was 21.5% / 35.6% respectively, with a year-on-year increase of -2.05/1.25pct. In the brand business, the gross profit margin of Damu online / Damu group purchase / Xiaomu direct marketing / Xiaomu franchise increased by 4.48/3.59 / – 2.04/1.61pct to 41.17% / 30.61% / 48.55% / 33.79% respectively. We analyzed that the increase in the gross profit margin of Damu was mainly due to the increase in the proportion of exquisite camping products and the improvement of sales discounts. In Q1, tent sales were hot and even out of stock under the background of the intensification of the epidemic. 22q1 net interest rate continued to rise. The net interest rate of 22q1 was 11.2%, increased by 1.1pct year-on-year (in terms of splitting, we calculated that the net interest rate of export / brand business was 11.3% / 11.1% respectively), and the net interest rate after deduction was 9.6%, increased by 1.1pct year-on-year, mainly due to the decrease of expense rate, the decrease of asset impairment loss and the decrease of income tax rate. 22q1 sales / management / R & D / financial expense ratio was – 0.6 / – 0.6 / – 0.3 / + 1PCT to 3.9% / 4.7% / 2.3% / 1.6% respectively. The increase in financial expense ratio was mainly due to the increase in interest expense of short-term borrowings. Asset impairment / revenue – 0.6pct to 0.7%. The income tax rate decreased by 5pct to 20%, mainly because Quzhou Tianye obtained the certification of high-tech enterprises and enjoyed a preferential enterprise income tax rate of 15%.
The increase in inventories was mainly due to the increase in stock. 22The inventory at the end of Q1 was 546 million yuan, with a year-on-year increase of 66% and a year-on-year increase of 3%. The operating cash flow was -95 million yuan, which was mainly due to the increase of goods preparation and OEM orders, resulting in the increase of due payment for goods preparation.
Investment advice
According to our analysis, (1) in the short term, the epidemic has spread seriously since mid and late March, which is good for camping demand. After the Qingming Festival, we expect it to continue after May Day; (2) In the medium term, the current domestic / export revenue accounts for 3:7, the future domestic sales is expected to account for more than half, and the superimposed net interest rate is expected to improve to more than 15%. On January 7, the company announced the change of the raised investment project, which changed Xiaomu’s store opening project into expanding Damu’s storage, that is, five years later, from 16000 m2 to 46000 m2, with the corresponding storage area CAGR = 24%, boosting market confidence. (3) In the long run, compared with 14% in the United States and 6% in Japan, the camping penetration rate in China is still 2-3 times higher than that in Japan. The company jointly signed the variety show “let’s camp” and pizza hut, which is expected to further expand consumers’ awareness of camping. For the reduction, we don’t think we need to be too pessimistic. On the one hand, according to the announcement, it doesn’t rule out that part of the reduction will be carried out through block trading, on the other hand, it will also improve the company’s liquidity. Considering that the first quarterly report exceeded the expectation, the revenue in 202224 was raised from RMB 1.256/16.21/1.978 billion to RMB 1.31/17/2.078 billion, the forecast of net profit attributable to parent company was raised from RMB 125 / 171 / 217 million to RMB 134 / 186 / 237 million, the corresponding EPS was raised from RMB 1.87/2.57/3.25 to RMB 2.01/2.79/3.55, the closing price on April 29, 2022 was RMB 60.02, and the corresponding PE for 22-24 years was 30 / 22 / 17x respectively, maintaining the “buy” rating.
Risk tips
The product iteration is not as expected, the epidemic situation is uncertain, the supply of campsites is not as expected, and there are systemic risks.
