\u3000\u3 Bohai Water Industry Co.Ltd(000605) 009 Hangzhou Haoyue Personal Care Co.Ltd(605009) )
Event: Hangzhou Haoyue Personal Care Co.Ltd(605009) released the annual report of 2021 and the first quarter report of 2022. In 2021, the company achieved an operating revenue of 2.462 billion yuan, a year-on-year decrease of 4.98%; The net profit attributable to the parent company was 363 million yuan, a year-on-year decrease of 39.75%; The net profit attributable to the parent company after deduction was RMB 353 million, a year-on-year decrease of 38.74%. In 2021q4, the company realized an operating revenue of 816 million yuan, a year-on-year increase of 47.52%; The net profit attributable to the parent company was 135 million yuan, a year-on-year increase of 23.00%; The net profit attributable to the parent company after deduction was 103 million yuan, with a year-on-year increase of 8.87%.
In addition, in 2022q1, the company realized an operating revenue of 515 million yuan, a year-on-year decrease of 2.80%; The net profit attributable to the parent company was 55 million yuan, a year-on-year decrease of 37.83%; The net profit attributable to the parent company after deduction was 52 million yuan, a year-on-year decrease of 39.74%.
The baby category grew steadily, and the epidemic and rising sea freight disturbed the adult health category
By category, infant hygiene products, adult hygiene products and other products achieved revenue of RMB 1.759/5.85/60 billion respectively in 2021, with a year-on-year increase of + 5.55 / – 5.13 / – 77.02%. In terms of baby hygiene products, the company increased production capacity, increased market development and R & D investment, and the output and sales volume increased by 12.82/9.30% year-on-year respectively, realizing steady growth; In terms of adult hygiene products, the overseas epidemic, the rise of sea freight, the rise of raw materials, exchange rate fluctuations and other factors put pressure on the sales, and the sales volume decreased by 2.84%; In terms of supply and demand of epidemic prevention products, the sales base of other products decreased significantly in 2021. In terms of sub regions, the domestic sales revenue reached 2.138 billion yuan in 2021, a year-on-year decrease of 5.36%; The revenue from export sales reached 266 million yuan, a year-on-year decrease of 6.89%, mainly due to the rise of overseas freight, the increase of customer procurement costs and the reduction of orders caused by the epidemic.
Increase investment in overseas and elderly care production capacity, and continue to promote independent brands
The company continued to promote capacity expansion. By the end of 2021, the fund-raising project “intelligent manufacturing technology transformation with an annual output of 600 million pieces of absorbent sanitary products” had been implemented, and the completion proportion of “construction project of intelligent manufacturing production base with an annual output of 1.2 billion pieces of absorbent sanitary products” reached 71.87%. The company increases the layout of aging products and plans to establish an aging care production base in Hubei, which is expected to be put into operation in 22 years; Continue to promote overseas business and increase capital to Thai subsidiaries. Thai companies have begun to put into operation one after another. Independent brands have entered the local and other Southeast Asian countries. The independent plant is planned to be put into operation in the second half of 22 years. In terms of R & D, the company insists on vigorously investing in R & D and continuously iterating products around consumer pain points. By the end of 21, the company has accumulated 145 patents, including 8 invention patents, 119 utility model patents and 18 appearance patents. In 22 years, the company plans to launch new products with completely innovative structure, such as easy to wear and take off menstrual pants and easy to wear and take off baby pull-on pants, super breathable new baby and adult diapers, menstrual pants, sanitary napkins and so on. The company continues to promote the construction of independent brand channels, and will strengthen brand promotion, focus on emerging e-commerce channels such as xiaohongshu, and gradually implement the brand promotion plan.
The rising cost of raw materials has led to short-term pressure on profitability and good performance in expense control
In terms of profitability, the company’s comprehensive gross profit margin in 21 years was 26.32%, down 10.61pct year-on-year, mainly due to the return of the volume and price of mask products to normal and the high cost of raw materials such as polymers. In 2022q1, the company’s comprehensive gross profit margin was 22.17%, a year-on-year decrease of 8.38pct and a month on month increase of 2.89pct.
The company’s expenses were well controlled. During the 21-year period, the expense rate was 8.35%, with a year-on-year decrease of 1.78 PCT, and the sales / management / R & D / financial expense rate was 3.66/1.97/3.70 / – 0.99% respectively, with a year-on-year increase of -1.25 / + 0.04 / + 0.37 / – 0.95 PCT respectively. The increase in R & D expenses was mainly due to increased R & D investment. During 2022q1, the expense rate of the company was 10.37%, a year-on-year decrease of 0.64pct. Under the comprehensive influence, the net interest rate of the company in 21 years was 14.73%, a year-on-year decrease of 8.50pct. In 2022q1, the net profit margin of the company was 10.66%, a year-on-year decrease of 6.01pct.
Investment suggestion: as the ODM leader in the nursing industry, the company has steadily expanded its production capacity, increased investment in overseas and elderly care production capacity, and continued to promote its own brand, which is expected to support the long-term growth of performance. We estimate that the operating revenue of Hangzhou Haoyue Personal Care Co.Ltd(605009) 20222024 will be RMB 2.568 billion, 2.987 billion and 3.620 billion, with a year-on-year increase of 4.30%, 16.32% and 21.19%; The net profit attributable to the parent company was RMB 305, 364 and 441 million, with a year-on-year increase of – 15.88%, 19.28% and 21.24%. The corresponding PE was 18.6x, 15.6x and 12.8x, and the investment rating of Buy-A was given.
Risk warning: the development of categories and channels is not as good as expected; Price fluctuation risk of raw materials; Risk of disturbance of epidemic situation and sluggish demand; Industry competition intensifies risks, etc.
