\u3000\u3 Shengda Resources Co.Ltd(000603) 587 Dazzle Fashion Co.Ltd(603587) )
Performance review
In 2021, the company’s revenue / net profit attributable to parent company / net profit deducted from non parent company were RMB 2898 million / 689 million / 647 million respectively, with a year-on-year increase of 13% / 9.47% / 12.38%, an increase of 22% / 10% / 14% over 19 years, and the performance was lower than expected. 22q1’s revenue / net profit attributable to parent company / net profit deducted from non parent company were 597 / 1.5 / 100 million respectively, with a year-on-year decrease of 9.09% / 23.07% / 38.14%. The performance was lower than expected. The decrease in net profit deducted was greater than that in net profit, mainly due to the increase of government subsidies.
Analysis and judgment
In the past 21 years, the growth of Da, DM and DZ was steady, and the high growth of RA came from the contribution of opening stores. The revenue of DA / DM / DZ / RA in 21 years was RMB 1.632/2.02/10.26/33 billion respectively, with a year-on-year increase of 10% / 3.03% / 18.62% / 114.66%, compared with 19% / 13% / 26% / 228% in 19 years. From the perspective of splitting, the revenue growth mainly comes from endogenous: (1) from the perspective of opening stores, the net number of DA / DM / DZ / RA stores opened in the whole year of 21 increased from 33 / – 3 / 10 / 5 to 660 / 50 / 474 / 15, and the extension increased by 5% / – 6% / 2% / 50% respectively. (2) From the endogenous perspective, the growth rate of endogenous contribution of DA / DM / DZ / RA in the whole year of 21 was 5% / 9% / 16% / 43% respectively. 22q1da / DM / DZ / RA revenue growth was – 19% / – 2% / 6% / 41% respectively. DA and DM fell, DZ was stable, and RA growth mainly came from the contribution of opening stores.
In the past 21 years, the online growth slowed down significantly, and the growth of direct sales and franchises accelerated. 21. The annual direct / franchise / online revenue was 1.290/12.16/386 billion yuan respectively, with a year-on-year increase of 11.78% / 17.19% / 5.04% (the growth rate in 20 years was 11% / 1% / 20% respectively). 22q1 direct / franchise / online revenue growth was – 14% / – 1% / – 12% respectively. Direct and online revenue were greatly affected.
The decrease of net profit margin in 22q1 was mainly affected by the decrease of gross profit margin and the increase of sales and management expense rate. In 2021, the annual gross profit margin was 76.67%, basically unchanged year-on-year. Among them, the gross profit margin of direct and online increased by 0.43 / -0.07pct year-on-year, and the gross profit margin of franchise decreased slightly by 0.18pct; The net interest rate for the whole year of 21 was 23.79%, with a year-on-year decrease of 0.77pct. The decrease of net interest rate was mainly due to the increase of financial expense rate and the decrease of non operating income. The sales / management / R & D / financial expense rate was 38% / 5.7% / 2.2% / – 1.1% respectively, with a year-on-year increase of -0.65/0.19/0.02/1.72pct. The increase of financial expense rate was mainly due to the decrease of interest income and the increase of interest expense caused by the implementation of new lease standards and the recognition of lease liabilities. Net investment income / income was 1.98%, with a year-on-year increase of 1.15pct; Non operating income / revenue was 1.5%, with a year-on-year decrease of 0.78pct. The income tax / income was 7.62%, a year-on-year decrease of 0.99pct, and the income tax rate decreased by 1.7pct to 24.3%, mainly due to the increase of deferred income tax assets caused by the change of fair value of trading financial assets. The net profit margin of 22q1 was 25.19%, a year-on-year decrease of 4.58pct. The decrease of 22q1 net profit margin was mainly due to the decrease of gross profit margin by 1.7pct and the increase of sales / management expense rate by 5.8/2.6pct. In addition, non operating income / income + 5pct to 10.8%, mainly from the increase of government subsidies; Asset impairment loss / revenue – 0.8pct to 2.1%.
Inventories fell month on month. At the end of the year, the company’s inventory was 371 million yuan, with a year-on-year increase of 12%, and the number of inventory turnover days was 180 days, with a year-on-year decrease of 53 days. 22The inventory at the end of Q1 was 359 million yuan, an increase of 13% year-on-year and a decrease of 3% month on month. The turnover days of accounts receivable in 21 years were 8 days, with a year-on-year decrease of 1 day.
Investment advice
Our analysis of the company’s future growth space lies in: 1) the new brand positioning is fast and fashionable, opening up more growth space than the traditional high-end women’s clothing industry; 2) Old brands Da, DZ and DM are expected to continue to open stores, improve store efficiency and contribute to revenue growth; 3) During the cultivation period, the RA brand will gradually mature, which will improve the store efficiency, and expand the accessories brand to bring new profit growth points; 4) The new lifestyle brand dother day has been put into trial operation on tmall on September 9, 2001, and is expected to gradually contribute to the increment. Considering the impact of the epidemic, the income of 22 / 23 years was reduced from 3.373/3.904 billion yuan to 3.15/3.65 billion yuan, the new 24-year income was 4.15 billion yuan, the net profit attributable to the mother in 22 / 23 years was reduced from 829 / 977 million yuan to 770 / 9 million yuan, the new 24-year net profit attributable to the mother was predicted to be 1.04 billion yuan, the corresponding EPS was reduced from 1.72/2.03 yuan to 1.6/1.88 yuan, the new 24-year EPS was 2.16 yuan, the closing price on May 5, 2022 was 14.72 yuan, and the corresponding PE of 22 / 23 / 24 years was 9 / 8 / 7X respectively, Maintain the “buy” rating.
Risk tips
Fierce market competition; Operating performance is subject to fluctuations; Epidemic uncertainty; Systemic risk.
