\u3000\u3 Bohai Water Industry Co.Ltd(000605) 080 Zhejiang Natural Outdoor Goods Inc(605080) )
Event overview
In 2021, the company’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were 842 / 220 / 199 million yuan respectively, with a year-on-year increase of 45% / 38% / 45%, and the performance was in line with expectations. 21q4’s revenue / net profit attributable to the parent company / net profit deducted from non attributable to the parent company were 177 / 36 / 28 million yuan respectively, with a year-on-year increase of 38% / 14% / 28% and a month on month increase of 4% / – 22% / – 28%. The month on month decline of Q4’s single quarter profit was mainly due to the increase of year-end bonus payment and R & D expenses of automation equipment. 22q1’s revenue / net profit attributable to parent company / net profit deducted from non attributable to parent company were RMB 330 million / 85 million / 77 million respectively, with a year-on-year increase of 47% / 38% / 34%, and the performance exceeded expectations. A cash dividend of 4.5 yuan will be distributed for every 10 shares.
Analysis and judgment:
The sales revenue of inflatable mattresses and waterproof bags increased rapidly. In terms of products, inflatable mattresses and waterproof bags maintained high growth: 1) inflatable mattress products increased by 47% to 636 million yuan, with year-on-year sales growth of 11% and unit price growth of 33%; 2) The revenue of waterproof cases and bags increased by 60% to 111 million yuan, mainly due to the increase in the sales volume of new ice bags, the sales volume of cases and bags increased by 56% year-on-year and the unit price increased by 2% year-on-year; 3) The revenue of pillow cushion increased by 37% to 56 million yuan, the sales volume increased by 40% year-on-year and the unit price decreased by 2% year-on-year. The revenue in foreign markets further increased, and the revenue outside China was 170 / 670 million yuan respectively, with a year-on-year increase of 33% / 49%.
The gross profit margin decreased slightly, and the gap between domestic and foreign gross profit margins narrowed. In 2021, the gross profit margin was 38.76%, a year-on-year decrease of 1.92 PCT, a decrease of 1.07 PCT compared with 19 years; The gross profit margin of 21q4 decreased by 2.87pct to 33.89%, and that of 22q1 decreased by 4.74pct to 36.47%. We analyze that the decrease of gross profit margin is mainly due to the rise in the price of raw materials and the change of product structure. In terms of splitting: 1) in terms of products, the gross profit margin of pillows and cushions decreased significantly, and the gross profit margin of air bed / luggage / pillows and cushions / other products were 42.66% / 26.42% / 28.67% / 24.7% respectively, with a year-on-year increase of -2.03 / – 2.17 / – 11.01/5.12pct; 2) The gross profit margin outside China was 37.54% / 39.05% respectively, with a year-on-year increase of 0.46 / – 2.75pct.
The net profit margin benefits from the increase and decrease of interest income and investment income, which is lower than the gross profit margin. The net interest rate in 2021 was 26.06%, a year-on-year decrease of 1.38pct. In terms of expense ratio, the company’s sales / management / R & D / financial expense ratio in 21 years was 1.37% / 8.64% / 3.52% / 0.01% respectively, with a year-on-year increase of -1.36/0.40 / – 0.06 / – 1.07pct. Among them, the management expenses increased by 59.49pct year-on-year, mainly due to the increase of management personnel, office expenses, entertainment expenses and the company’s listing expenses; Financial expenses decreased by 98.48% year-on-year, mainly due to the significant increase in interest income. Net investment income / income was 3.05%, with a year-on-year increase of 2.31pct.
Operating cash flow decreased and inventories increased. The net operating cash flow was 143 million yuan, a year-on-year decrease of 31%, mainly due to the increase of sales orders and the increase of raw material procurement in order to prevent the change of epidemic situation during spring break. At the end of the year, the inventory was 255 million yuan, a year-on-year increase of 73.96%. The company’s inventory turnover days were 140 days, a year-on-year decrease of 17 days; The turnover days of accounts receivable were 48 days, a year-on-year decrease of 5 days.
Investment advice
According to our analysis, the company has high barriers in the field of TPU, which brings high bargaining power. The price increase driven by the price rise of raw materials is expected to be reflected in 22 years. The contribution of Vietnam and headquarters to production capacity will also be reflected in 22 years. Household inflatable mattresses, aquatic products and insulated bags are expected to become new growth points. Maintain the income of RMB 1.099/1.427 billion in 2022 / 2023, increase the income of 24 years to RMB 1.752 billion, maintain the net profit attributable to parent in 22 / 23 to RMB 312 / 411 million, increase the net profit attributable to parent in 24 years to RMB 509 million, maintain the EPS of 22 / 23 to RMB 3.08/4.06 and increase the EPS of 24 years to RMB 5.03 respectively, and the closing price of 63.2 yuan on April 28, 2022 corresponds to the PE of 22-24 years to 21 / 16 / 13X respectively, maintain the target price of 84 yuan and maintain the “buy” rating.
Risk tips
Risk of epidemic uncertainty; Shipping delay; Price fluctuation risk of raw materials; The ramp of the factory is not as expected; Systemic risk.
