\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 078 Kidswant Children Products Co.Ltd(301078) )
Event: Kidswant Children Products Co.Ltd(301078) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the operating revenue will be 9.049 billion yuan / + 8.3%, and the net profit attributable to the parent company will be 202 million yuan / – 48.44%. In 2022q1, the operating revenue was 2.109 billion yuan / – 2.9%, and the net profit attributable to the parent company was – 32 million yuan / – 179.88%.
Comments:
Revenue side: operating revenue of 9.049 billion yuan / + 8.3% in 2021. In 2022q1, the operating revenue was 2.109 billion yuan / – 2.9%. By quarter: 2021q1 / Q2 / Q3 / Q4 achieved revenue of 2.172 billion yuan / 2.265 billion yuan / 2.159 billion yuan / 2.452 billion yuan respectively, and Q3 / Q4 increased by + 9.2% / – 3.2% year-on-year respectively. In terms of stores, by the end of 2021, the company had 495 stores, 71 new stores and 10 closed stores. The growth of the number of stores opened promotes the growth of the company’s revenue; The number of new stores is under pressure, and the revenue of old stores is relatively improved.
Gross profit margin: the gross profit margin in 2021 is 30.6% / + 0.1pct. The gross profit margin of 2022q1 is 28.2% / – 0.2pct. The gross profit margin is relatively stable.
Expense side: during 2021, the expense rate is 29.0% / + 3.4pct, of which, 1) the sales expense rate is 21.4% / + 2.1pct, and the increase of personnel expenses of the company is faster than that of single store sales; 2) Management fee rate 4.8% / + 0.2pct; 3) R & D expense rate 1.1% / + 0.1pct; 4) The financial expense rate is 1.6% / + 1.0pct. During 2022q1, the expense rate was 30.4% / + 2.9pct, of which, 1) the sales expense rate was 22.5% / + 2.1pct, which was related to the pressure of epidemic sales; 2) The rate of administrative expenses is 5.4% / + 1.0pct, which is related to the pressure of epidemic sales; 3) R & D expense rate 1.1% / + 0.1pct; 4) The financial expense rate is 1.4% / – 0.2pct.
Profit side: in 2021, the net profit attributable to the parent company is 202 million yuan / – 48.44%, deducting 122 million yuan / – 60.84% of the net profit not attributable to the parent company. In 2022q1, the net profit attributable to the parent company was -32 million yuan / – 179.88%, and the net profit not attributable to the parent company was -39 million yuan / – 320.54%.
Investment suggestion: Kidswant Children Products Co.Ltd(301078) is a mother and child retail enterprise with endogenous and cross regional expansion ability. The company’s unique chain store model puts forward higher requirements for property, talent management, digital middle platform, brand and supply chain. The company has realized continuous endogenous store expansion throughout the country, with broad store space, continuous dilution of expenses and further release of profits. The short-term profit is affected by multiple factors such as the epidemic situation, the decline of fertility, the climbing of store opening and so on. ① the company leads the structural upgrading and improves the output value of single customer under the guidance of data; ② Low cost, differentiated supply chain and differentiated services to obtain differentiated competitive advantages; ③ It is expected to further achieve results in improving internal management and efficiency, driving the operation to improve efficiency. It is expected that the net profit attributable to the parent company from 2022 to 2024 will be 209 million yuan, 392 million yuan and 640 million yuan respectively (previous value: 20222023, 332 / 550 million yuan), maintaining the overweight rating.
Risk tip: the birth rate is declining, the economic growth and consumption level are declining, the scale effect caused by the expansion of new stores is decreasing, and the covid-19 virus epidemic is repeated.
