\u3000\u3 Shengda Resources Co.Ltd(000603) 818 Qumei Home Furnishings Group Co.Ltd(603818) )
Performance summary: the company released the annual report of 2021 and the report of the first quarter of 2022, and realized a revenue of 5.07 billion yuan (+ 18.6%) in 2021; The net profit attributable to the parent company was 180 million yuan (+ 71.3%); The net profit deducted from non parent company was 150 million yuan (+ 55.6%). Among them, single Q4 company achieved an operating revenue of 1.33 billion yuan (- 3.4%); The net profit attributable to the parent company was -3.474 million yuan (- 104.8%). In 2022, Q1 company achieved a revenue of 1.31 billion yuan (+ 14.3%); The net profit attributable to the parent company was 58.147 million yuan (- 5.3%); The net profit deducted from non parent company is 44.35 million yuan (- 10.6%).
The equity incentive plan was issued to demonstrate the company’s confidence in boosting domestic sales business. The company has issued the draft of equity incentive plan and plans to grant 911 million restricted shares to the incentive objects, accounting for about 1.57% of the total share capital of the company when the draft incentive plan is published. Among them, 8.51 million shares were granted for the first time, accounting for about 1.47% of the total share capital of the company when the draft incentive plan was announced. The number of incentive objects granted in this incentive plan for the first time is 74, including directors, senior managers and core backbone personnel of the company, with a wide incentive range. The assessment target is the domestic revenue of the company, and the growth targets of domestic revenue from 2022 to 2024 are 2.2%, 10% and 10% respectively.
Cost reduction and fee control have achieved remarkable results, and profitability has improved. In 2021, the company’s overall gross profit margin was 35.8%, a year-on-year decrease of 3.2pp, mainly due to the rise in raw material costs, combined with the impact of RMB appreciation and rising shipping costs. In terms of brand acquisition, stressless’s gross profit margin in 2021 was 41.7% (- 2.2pp); The gross profit margin of img is 36.6% (- 4.5pp); Svane’s gross profit margin is 19.1% (- 2.7pp). In terms of domestic sales, the gross profit margin of customized furniture is 35.2% (- 6.4pp); The gross profit margin of finished furniture is 25.2% (- 4.7pp); The gross profit margin of jewelry and other products is 26.6% (- 0.3pp). In terms of expense rate, the overall expense rate of the company in 2021 was 30.3% (- 4.9pp), and the effect of fee control was good. The sales expense ratio of the company in 21 years is 17.3% (- 1.4pp); The management fee rate is 7.2% (- 1.2pp); The R & D expense rate is 2% (- 0.1pp); The financial expense ratio was 3.9% (- 2.2pp), which was mainly due to the decrease of loan interest cost. Overall, the company’s net profit margin was 3.5%, with a year-on-year increase of 1.1pp. With the efforts of optimizing the company’s product structure and reducing costs and fees, the company’s profitability has improved throughout the year.
22q1 overseas business performed well, and domestic sales were temporarily under pressure due to the repeated impact of the epidemic. The overall gross profit margin of Q1 company in 22 years was 35.6%, with a year-on-year decrease of 2.9pp. In the first quarter, the overall expense rate was 30.3%, down 1.9pp year-on-year, and the effect of fee control was improved. Among them, the sales / management / R & D / financial expense rates were 16.1% / 7.4% / 1.8% / 5.2%, year-on-year – 3PP / + 0.4pp / + 0.2pp / + 0.5pp; The net interest rate decreased by 0.4% year-on-year to 9pp. In addition, the net cash flow from the company’s operating activities in the current period was 17.907 million yuan, a year-on-year increase of 133.8%, mainly due to the increase in sales receipts. Among them, the order growth rate of 22q1 stressless brand comfortable chairs exceeded 20%, the order growth rate of electric chairs, sofas and dining chairs exceeded 50%, the order growth rate of mattresses was close to 30%, and there were abundant orders in hand. With the improvement of production capacity, ekornesas’s revenue in the first quarter increased by 34% year-on-year and its net profit increased by 32% year-on-year.
Core products performed well, and Ekornes maintained rapid growth. The company’s business grew steadily in the past 21 years. In the business of China Qumei headquarters, customized furniture achieved an operating revenue of 850 million yuan, a year-on-year increase of 7.9%; The operating income of finished furniture was 640 million yuan, a year-on-year decrease of 7.1%; Jewelry and other products achieved an operating revenue of 270 million yuan, a year-on-year increase of 66.6%. In Ekornes series of businesses, stressless achieved an operating revenue of 2.38 billion yuan, with a year-on-year increase of 27.3%. Stressless brand China market shows great development potential. The core indicators such as average gross profit margin, retail floor efficiency, investment payback period and average customer unit value of dealers have reached the leading level in the industry. At present, stressless has become the main source of income of the company; IMG achieved an operating revenue of 610 million yuan, a year-on-year increase of 30.8%. Img brand is an effective supplement to stressless. Its brand positioning is medium and high-end, which is more in line with the consumer demand of the Chinese market; Svane achieved an operating revenue of 230 million yuan, with a year-on-year increase of 13.5%. During the reporting period, the company restarted the svane brand growth strategy and gradually migrated the production capacity of beds and mattresses to Lithuania. With the reduction of production cost and the optimization of product design, the competitiveness of svane brand products was improved and the cost performance was significantly enhanced. In 2022, the company plans to promote the svane brand to the global market. With the increase of sales channels, the svane brand is expected to accelerate its development.
China’s direct sales market is growing rapidly, and the dealer training system is comprehensively upgraded. In terms of sales mode, the company’s Direct stores realized an operating revenue of 300 million yuan in 21 years, with a year-on-year increase of 40.2%; The operating revenue of the dealership was 4.42 billion yuan, a year-on-year increase of 17.9%; The operating revenue of bulk business was 140 million yuan, a year-on-year increase of 49.9%; Online sales realized an operating revenue of 55.888 million yuan, a year-on-year decrease of 0.8%; Other sales models achieved an operating revenue of 54.833 million yuan, a year-on-year decrease of 2.9%. With the advantages of the company’s “full category, one-stop” and large store model, the direct market actively develops drainage channels, effectively improves the conversion rate of inbound passenger flow through the standardized construction of marketing management organization and the application of smart store system, so as to significantly improve the front-end drainage, conversion and transaction, and greatly increase the business indicators such as single store income, floor efficiency and per capita output. On the one hand, the improvement of the company’s direct marketing ability can effectively enhance its own retail ability and cultivate retail talents. On the other hand, it can also help dealers better improve their business ability through the training system.
Stores continue to expand, and the distribution business maintains the core competitive advantage of big home. By the end of the 21st century, the total number of stores of the company was 8479, with 688 newly opened and 297 closed during the year. Among them, the company has 8458 outlets, including 1155 Qumei brands, 57 Yaoxing brands, 3502 stressless, img3256 and svane486; There are 21 direct selling stores. During the reporting period, the company optimized the product presentation efficiency of large store model through store image upgrading, and effectively improved the single store income level of flagship stores. In view of the characteristics of “weak team ability and small investment scale” of new dealers and small and medium-sized dealers, the company upgraded the original store opening model, encouraged new dealers and small and medium-sized dealers with weak team ability to open single category stores, started with customized stores and software stores, and gradually increased categories according to the operation situation. The operation difficulty of small and medium-sized dealers decreased, and the survival rate of opening stores increased as a whole.
Profit forecast and investment suggestions. It is estimated that the company’s EPS from 2022 to 2024 will be 0.75 yuan, 1.01 yuan and 1.24 yuan respectively, and the corresponding PE will be 13 times, 10 times and 8 times respectively. Considering the large market space of the company’s overseas business and the remarkable effect of cost reduction and fee control, the “hold” rating is given for the first time.
Risk tips: the risk of sharp fluctuations in the price of raw materials, the risk of sharp fluctuations in the exchange rate, the risk of intensified international trade friction, the risk of intensified industry competition, and the risk of expanding the scope of the epidemic.
