\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 51 Gree Electric Appliances Inc.Of Zhuhai(000651) )
Event: Recently, the company released its 2021 annual report and the first quarterly report of 2022.
Comments:
The company's revenue growth is good and its operation meets expectations. In 2021, the company achieved a total operating revenue of 189654 billion yuan, a year-on-year increase of 11.24%; The net profit attributable to the parent company was 23.064 billion yuan, a year-on-year increase of 4.01%. Quarterly, in Q4 2021, the company achieved a revenue of 50.105 billion yuan, a year-on-year increase of 16.44%, and the net profit attributable to the parent company was 7.419 billion yuan, a year-on-year decrease of 12.47%. In Q1 2022, the company achieved a revenue of 35.535 billion yuan, a year-on-year increase of 6.02%, and a net profit attributable to the parent company of 4.003 billion yuan, a year-on-year increase of 16.28%. In Q1 2022, affected by the epidemic, China's air conditioning sales, delivery and installation were blocked, and the low base effect disappeared. The company grew against the trend against the background of weak overall macro environment, but the quarterly growth rate on the revenue side weakened month on month, while the quarterly growth rate on the profit side improved month on month. From the perspective of contract liabilities, the contract liabilities of Q1 company in 2022 were 18.811 billion yuan, an increase of 21.32% over the beginning of the year. Combined with the rise in the price of household appliances since March, it reflects the high willingness of the company's dealers to pick up goods before the peak season. With the improvement of the epidemic situation in China, the supply chain is gradually restored to stability, and the peak sales season of superimposed air conditioning is coming. It is expected that the company's business will have restorative growth.
The global layout of the company has achieved remarkable results. In 2021, the company's business income in China was 122305 billion yuan, a year-on-year increase of 10.78%; Overseas business income was 22.535 billion yuan, a year-on-year increase of 12.56%. In 2021, the company's overseas business performed better, mainly because the global epidemic situation improved, the global economy continued to recover under the continuous fiscal stimulus and monetary easing policy, Gree seized the export dividend and achieved performance growth. In 2021, Gree Electric Appliances Inc.Of Zhuhai(000651) made continuous efforts in overseas markets and performed prominently in emerging markets. Its products were sold to more than 180 countries and regions, of which independent brands accounted for 51% and sales increased by 23% year-on-year.
The company's business diversification continued to deepen, and the revenue of green energy business grew the fastest among all business segments. At present, the company's consumption fields cover household air conditioners, HVAC, refrigerators, washing machines, water heaters, kitchen appliances, environmental appliances, communication products, smart buildings and smart homes; The industrial field covers high-end equipment, precision molds, refrigeration equipment, motors, compressors, capacitors, semiconductor devices, precision casting, basic materials, industrial energy storage and renewable resources. In 2021, the company listed the green energy business separately, realizing a revenue of 2.907 billion yuan, a year-on-year increase of 63.13%. Under the strong impetus of the national "double carbon" strategy, Gree has developed photovoltaic (storage) air conditioning sector, new energy vehicles, lithium battery sector and other related color production industries, and gradually formed a scale. From the perspective of profitability, the gross profit margin of green energy business in 2021 is 6.11%, which still has great room for improvement.
The profitability of the company is under short-term pressure. In 2021, the gross profit margin of the company's sales was 24.28%, a year-on-year decrease of 1.86 percentage points, mainly due to the sharp rise in the price of upstream raw materials. In 2021, the net profit margin of the company's sales was 12.15%, a year-on-year decrease of 1.10 percentage points, and the decline of net profit margin was less than that of gross profit margin. In Q1 2022, the company's gross profit margin on sales was 23.66%, a year-on-year decrease of 0.77 percentage points, and the net profit margin on sales was 10.16%, a year-on-year decrease of 0.24 percentage points. The year-on-year decrease of gross profit margin and net profit margin narrowed compared with the fourth quarter of 2021. Facing a variety of external uncertain factors, the company can pay attention to the turning point of improving the company's profitability in the future by optimizing the product structure, optimizing the management expense rate and sales expense rate, reducing costs and increasing efficiency.
Investment suggestion: the company is a leader in China's air conditioning industry, with gradually enriched product categories and gradually deepened the reform of new retail channels; At the same time, we will accelerate the process of diversification and enhance our comprehensive competitiveness. It is estimated that the company's EPS in 2022 / 2023 will be 4.51 yuan / 5.07 yuan respectively, and the corresponding PE will be 7 times / 6 times respectively, maintaining the recommended rating.
Risk warning: epidemic risk; Macroeconomic fluctuation risk; Price fluctuation risk of raw materials; Global asset allocation and overseas market expansion risks; Exchange rate change risk, etc.
