\u3000\u3 Shengda Resources Co.Ltd(000603) 313 Healthcare Co.Ltd(603313) )
Key investment points
The operation was better month on month, and the high price of raw materials fell back
(1) the operation is better quarter by quarter: 21q4 company has made provision for accounts receivable and inventories with signs of impairment of some ODM businesses. If the impact is not taken into account, we estimate that the company has achieved operating profit with non deduction of 21q4 (while 21q3 still has a loss of 27 million after non deduction, which is better month on month). 22q1 gross profit margin is 29.24% (+ 0.31pct). Under the background of the rise in the average price of raw materials, the efficiency improvement brought by the plant climbing is the optimization item.
(2) the follow-up price of raw materials is expected to continue to fall: in Q1, the price of raw materials rose significantly under the price rise expectation of the Russian Ukrainian war, but then fell rapidly. As of April 29, 2022, the average price of polyether / TDI / MDI is 11100 yuan / 17350 yuan / 21800 yuan / ton, which is - 2% / + 11% / 6% respectively compared with the beginning of the year, but it is 16% / 11% / 12% lower than the peak during the period. Considering the supply and demand pattern, it is expected that there is still further downward space in the future, driving the company's gross profit margin upward.
US regional orders are expected to pick up from May to June, and US factories will give full play to their regional advantages
In the past 21 years, the company achieved revenue of 4.889 billion (+ 29.41%) in North America and 1.709 billion (+ 16.56%) in Europe; 22q1 North America achieved revenue of 1.343 billion (+ 22.56%), while Europe achieved revenue of 429 million (+ 1.11%). On the supply side, the second anti-dumping brought about a gap of about $600700 million on the supply side of the United States. In 2021, many orders were not obtained because the production capacity climbed less than expected. However, after the release of the production capacity of American factories in 22 years, relying on the advantage of the company's quotation side over its local competitors in the United States, it is optimistic that the orders will flow back to Healthcare Co.Ltd(603313) , driving the high growth of income in the United States. On the demand side, Q1 North America's revenue is still faster than the company as a whole. After the outbreak of the Russian Ukrainian war in March, the short-term U.S. home purchase demand decreased, but it is expected that consumer confidence will be boosted from May to June, further driving the order scheduling of factories in the East / West of the United States.
China's retail channels have expanded rapidly and continued to increase investment in 22 years
(1) retail in China: in the past 21 years, independent brand direct / franchise / online / hotel / new business achieved revenue of 77 million (+ 37.97%) / 246 million (+ 87.56%) / 157 million (+ 38.69%) / 184 million (+ 30.04%) / 47 million (- 12.84%). In 2012, Q1's independent brand direct sales / franchising / online / hotel / new business realized revenue of 09 million (- 46.12%) / 51 million (+ 18.35%) / 31 million (+ 25.27%) / 43 million (+ 11.48%) / 08 million (- 16.00%). At the end of the 21st century, the number of mlily stores reached 1090 (+ 470), including 928 mlly distribution stores (+ 372) and 162 Direct stores (+ 98). 22q1 independent brands account for a large number of franchise / online / hotel channels, which are + 18% / + 25.27% / + 11.48% respectively. They perform well in the context of the epidemic in China. The number of mlily stores has also newly opened to 1133 (+ 43).
The plan of opening more than 600 stores in 22 years is maintained, and the offline retail business is expected to grow by 60-80%.
(2) classification: in the past 21 years, the company's mattress / pillow / sofa / electric bed / bedding achieved revenue of 3.748 billion (+ 21.66%) / 633 million (+ 12.13%) / 1302 million (+ 33.56%) / 761 million (+ 15.46%) / 797 million (+ 51.99%) /. The company actively laid out new categories of intelligent electric beds. With the continuous high growth of production capacity of Thai factories, the sales volume reached 50800 pieces (+ 20.26%) in 21 years, and it is optimistic that it will continue to develop in 22 years. In addition, the company continues to promote the R & D and listing of new sofa categories. In 22 years, the company will focus on launching new NISCO living sofa categories, extend the living room with sofa as the core, integrate and extend the overall household category of the whole house, and is optimistic about the contribution increment of domestic sofa in 22 years.
Marketing expenses increased and gross profit margin rebounded in 22q1
(1) gross profit margin: in the 21st year, the comprehensive gross profit margin decreased by 5.45pct to 28.47% year-on-year, and the gross profit margin in the single quarter of 22q1 was 29.24% (+ 0.31pct), which was mainly dragged down by the sharp rise in the price of raw materials & sea freight and the poor climbing of American factories;
(2) the period cost rate increased by 3.49pct to 29.56% over the same period of 21 years. In the 21st year, the sales expense rate increased by 2.64pct to 16.14% at the same time, and the investment in sales channel expenses gradually shifted to the C-end. The increase in sales brought about the increase in sales channel expenses, employee salaries and advertising expenses; The rate of management + R & D expenses increased by 0.94pct to 9.68% at the same time, mainly due to the establishment of factories overseas and the attraction of management talents to assist the development of enterprises; The financial expense ratio decreased by 0.09pct to 3.74%, mainly due to the increase of liabilities caused by the expansion of the company, the increase of interest expenses on borrowings, and the increase of credit card handling fees caused by the rise of American mor income. The total expense rate during 22q1 is 25.39% (+ 0.33pct).
(3) estimated liabilities: in 2021, due to litigation events, the company accrued estimated liabilities of 110 million. In February 2022, the company announced the latest judgment of the court. The total amount of expenses to be paid by Healthcare Co.Ltd(603313) party was adjusted from US $247056 million in the first instance judgment to US $172741 million. It is expected that there will be a certain expected reversal of liabilities and increase the profit of 22 years.
Profit forecast and valuation
We expect the company to achieve revenue of RMB 10.011 billion, RMB 12.052 billion and RMB 14.596 billion from 2022 to 2024, with a year-on-year increase of 23%, 20.39% and 21.11%; The net profit attributable to the parent company is 417 million yuan, 710 million yuan (+ 70%) and 1007 million yuan (+ 42%), and the profit margin is expected to be gradually repaired from 2022 to 2024, corresponding to PE of 11.59x/6.81x/4.8x in 22-24 years respectively. Considering that the company's share price has been at the bottom and the long-term growth path is still clear, maintain the "buy" rating.
Risk tip: the recovery of overseas epidemic did not meet expectations, and the price of raw materials rose sharply
