\u3000\u3 Shengda Resources Co.Ltd(000603) 661 Henglin Home Furnishings Co.Ltd(603661) )
Event: Henglin Home Furnishings Co.Ltd(603661) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 5.778 billion yuan, a year-on-year increase of 21.81%; The net profit attributable to the parent company was 338 million yuan, a year-on-year decrease of 7.05%; The net profit attributable to the parent company after deduction was RMB 287 million, a year-on-year decrease of 11.24%. In 2021q4, the company realized an operating revenue of 1.807 billion yuan, a year-on-year increase of 19.07%; The net profit attributable to the parent company was 72 million yuan, with a year-on-year increase of 18.05%; The net profit attributable to the parent company after deduction was 49 million yuan, a year-on-year increase of 7.21%.
In addition, in the first quarter of 2022, the company achieved an operating revenue of 1.401 billion yuan, a year-on-year increase of 35.66%; The net profit attributable to the parent company was 73 million yuan, a year-on-year increase of 9.13%; The net profit attributable to the parent company after deducting non-profit was 68 million yuan, with a year-on-year increase of 8.87%.
The big home strategy continued to advance, and the growth rate of domestic sales was beautiful
The company has gradually built a product system for the overall service of office and home, and developed from a manufacturer focusing on seat furniture to a full scene service provider of office and civil furniture. 1) By product, in 2021, the company’s office chair, sofa, massage chair and system office achieved revenue of RMB 2.235/11.73/3.10/752 billion respectively, with a year-on-year increase of – 3.16% / 31.14% / 114.69% / – 6.88% respectively. 2) By channel, the company’s bulk channel business achieved an operating revenue of 5.068 billion yuan in 2021, with a year-on-year increase of 25.16%; Online channels achieved an operating revenue of 638 million yuan, a year-on-year decrease of 2.02%. 3) In terms of regions, in 2021, the company achieved an operating revenue of 4.442 billion yuan in overseas regions, with a year-on-year increase of 8.27%; The operating revenue of domestic regions was 1.264 billion yuan, a year-on-year increase of 111.51%. Among them, the growth of export sales is mainly due to the development of international market and the growth of overseas e-commerce business, and the growth of domestic sales is mainly due to the sales revenue of Dr. kitchen.
Traditional business grew steadily and new business development achieved breakthroughs
In 2021, the company adheres to the two wheel drive strategy of traditional advantageous business and new development business, and creates a business pattern in which traditional business maintains scale and new business promotes development. 1) In terms of traditional office swivel chair manufacturing business, the company continued to maintain its market share and comprehensive strength at the first echelon level in the furniture foreign trade industry. The traditional OEM business achieved an operating revenue of 3.665 billion yuan, a year-on-year increase of 14.27%. 2) In terms of new business, i.e. panel furniture business, in 2021, the company purchased 100% equity of Dr. kitchen, expanded customized furniture business and entered the field of fine decoration and supporting facilities. Within the scope of consolidated statements, Dr. Chu realized an operating income of 614 million yuan and a net profit attributable to the parent company of 661555 million yuan in 21 years. Through the merger, the company has made a breakthrough in the field of customized furniture and laid a solid foundation for the future development of the company into a cross domain collaborative furniture brand.
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 22.50%, down 6.99pct year-on-year, mainly due to the rise of raw material prices and the fluctuation of RMB exchange rate. In 2022q1, the company’s comprehensive gross profit margin was 21.30%, down 6.05pct year-on-year.
In terms of period expenses, the expense rate during the 21-year period was 16.40%, with a year-on-year decrease of 4.75pct, and the expense rates of sales / management / R & D / finance were 6.52% / 4.88% / 3.49% / 1.51% respectively, with a year-on-year decrease of -5.08 / + 0.20 / + 0.54 / – 0.42pct respectively. During 2022q1, the expense rate of the company was 17.85%, a year-on-year decrease of 4.18pct. Under the comprehensive influence, the net interest rate of the company in 21 years was 5.78%, a year-on-year decrease of 2.20pct; In 2022q1, the net profit margin of the company was 5.13%, a year-on-year decrease of 1.36pct. With the steady growth of high gross profit new business performance such as system office and customized home, the overall profitability of the company is expected to be further improved.
Investment suggestion: Henglin Home Furnishings Co.Ltd(603661) based on traditional business, continue to promote software, customization and other businesses, and expand business modules. We expect Henglin Home Furnishings Co.Ltd(603661) we expect the operating revenue of Henglin Home Furnishings Co.Ltd(603661) 2022-2024 to be RMB 6.825 billion, 7.889 billion and 9.033 billion, with a year-on-year increase of 18.12%, 15.59% and 14.50%; The net profit attributable to the parent company was 401 million yuan, 481 million yuan and 579 million yuan, with a year-on-year increase of 18.76%, 19.95% and 20.37%. The corresponding PE was 8.4x, 7.0x and 5.8x, and the investment rating of Buy-A was given.
Risk warning: risk of sharp fluctuations in raw material prices and exchange rates; New business and new customer development are less than expected risks; The risk of repeated disturbance of the epidemic.
