\u3000\u300 China Vanke Co.Ltd(000002) 6 Fiyta Precision Technology Co.Ltd(000026) )
Event: Fiyta Precision Technology Co.Ltd(000026) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 5.244 billion yuan, a year-on-year increase of 23.57%; The net profit attributable to the parent company was 388 million yuan, a year-on-year increase of 31.87%; The net profit attributable to the parent company after deduction was 369 million yuan, a year-on-year increase of 37.28%. In 2021q4, the company realized an operating revenue of 1.159 billion yuan, a year-on-year decrease of 10.78%; The net profit attributable to the parent company was 45 million yuan, a year-on-year decrease of 42.94%; The net profit attributable to the parent company after deducting non-profit was 41 million yuan, a year-on-year decrease of 41.89%. In addition, in 2022q1, the company realized an operating revenue of 1.174 billion yuan, a year-on-year decrease of 14.84%; The net profit attributable to the parent company was 86 million yuan, a year-on-year decrease of 26.96%; The net profit attributable to the parent company after deducting non-profit was 84 million yuan, a year-on-year decrease of 25.95%.
The optimization of product structure helped the steady growth of revenue, and the 22q1 revenue was under pressure due to the disturbance of the epidemic
Benefiting from the return of overseas consumption, the company focused on brand power, product power and channel power, made every effort to promote high-quality development and the implementation of big country brand strategy, and achieved steady growth in revenue. By category, (1) the revenue of watch retail services reached 3.911 billion yuan, a year-on-year increase of 30.32%, accounting for 74.58%. It achieved a bright growth under the high base in 2020, mainly due to the increase of the proportion of medium and high-end. Hengeely’s average single store output increased by 27.93% year-on-year, the average customer unit price increased by 25.44% year-on-year, and the inventory turnover rate exceeded twice. (2) Watch brands achieved a revenue of 1.012 billion yuan, a year-on-year increase of 4.37%, accounting for 19.31%. In terms of private brands, the company continued to promote the integration of products and sales, deepened Aerospace genes in marketing, carried out integrated marketing in combination with aviation hotspots, promoted the year-on-year growth of Aviation series products, deeply cultivated core series in products, significantly improved the success rate of new product development, promoted refined operation, and increased the average customer unit price by 12% year-on-year. (3) The precision technology business has begun to take shape, with a revenue of 150 million yuan, a year-on-year increase of 8.13%, accounting for 2.89%. The company has orderly explored new markets such as aerospace and medical devices. Some projects have entered the stage of batch cooperation, and the revenue of intelligent wearable business has increased by 70% year-on-year by creating explosive products. The revenue of 22q1 company was 1.174 billion yuan, a year-on-year decrease of 14.84%, mainly due to the decline of store traffic caused by the superposition of 21q1 high base and epidemic situation.
We continued to optimize the channel structure and achieved initial results in refined operation
(1) offline, in the past 21 years, the Fiyta Precision Technology Co.Ltd(000026) brand has steadily promoted the entry of shopping center stores, opened 100 self operated shopping center stores and closed some loss making stores; Hengeely steadily promoted the expansion of high-quality new stores and the transformation of old stores. It cooperated with Lifeng group in the high-end collection store timevall é e, with medium and high-end channels accounting for more than 55%, driving the steady increase of single store revenue. In terms of tax-free channels, the company set up a wholly-owned subsidiary in Hainan to further improve the layout of the tax-free market in Hainan. (2) In terms of online operation, the company has gradually deepened its “double brand” , accounting for online business.
At the same time, the company’s fine operation has achieved initial results Fiyta Precision Technology Co.Ltd(000026) brand continues to deepen the operation of CRM system, member recruitment and potential customer transformation continue to grow steadily, offline member sales account for 94%, and private domain traffic has begun to be distributed. Hengeely’s digital retail system continues to iterate and promote the development of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration. The re purchase of old customers and the turnover of potential customers have increased significantly, accounting for more than 50% of the overall revenue.
Structural optimization and upgrading help make profits steady, and refined operation promotes efficiency
In terms of profitability, the company’s comprehensive gross profit margin in 2021 was 37.34%, a year-on-year decrease of 0.46pct. The comprehensive gross profit margin of 22q1 company was 38.21%, with a year-on-year increase of 0.88pct. The optimization of product structure promotes the company’s gross profit margin to remain stable.
During 2021, the expense rate was 26.77%, with a year-on-year decrease of 1.79 PCT, and the expense rates of sales / management / R & D / finance were 20.02% / 4.99% / 1.10% / 0.66% respectively, with a year-on-year decrease of -0.50 / – 1.06 / – 0.11 / – 0.13 PCT respectively. The expense rate during 22q1 was 28.42%, with a year-on-year increase of 2.22pct. At the same time, the company disposed of assets in 21 years, superimposed with the increase of non operating expenses, and the net interest rate attributable to the parent company in 21 years was 7.40%, a year-on-year increase of 0.47pct; Under the comprehensive influence, the net interest rate attributable to the parent company of 22q1 was 7.36%, a year-on-year decrease of 1.22pct.
Investment suggestion: Fiyta Precision Technology Co.Ltd(000026) is the leader in China’s watch industry. Its product, channel and marketing advantages have been continuously consolidated, and the results of fine operation have begun to show. Considering the repeated impact of the epidemic, we expect the operating revenue of Fiyta Precision Technology Co.Ltd(000026) 20222024 to be RMB 5.487 billion, RMB 6.056 billion and RMB 6.783 billion, with a year-on-year increase of 4.64%, 10.37% and 12.00%; The net profit attributable to the parent company was 398 million yuan, 447 million yuan and 518 million yuan, with a year-on-year increase of 2.66%, 12.26% and 15.93%. The corresponding PE was 9.5x, 8.5x and 7.3x, giving a Buy-A investment rating.
Risk warning: the epidemic situation repeatedly affects the risk; Channel and product expansion is less than expected risk; Watch consumption demand is less than expected and other risks.
