\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 51 Gree Electric Appliances Inc.Of Zhuhai(000651) )
Key investment points
Performance summary: the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved a revenue of 189.65 billion yuan, a year-on-year increase of 11.2%; The net profit attributable to the parent company was 23.06 billion yuan, a year-on-year increase of 4%. In Q4, the company achieved a revenue of 50.11 billion yuan in a single quarter, a year-on-year increase of 16.4%; The net profit attributable to the parent company was 7.42 billion yuan, a year-on-year decrease of 12.5%. In 2022q1, the company achieved a revenue of 35.53 billion yuan, a year-on-year increase of 6%; The net profit attributable to the parent company was 4 billion yuan, a year-on-year increase of 16.3%. The company's revenue continued to grow, and the growth rate of Q1 performance was bright. In addition, the company plans to distribute a cash dividend of 20 yuan (including tax) for every 10 shares to all shareholders, with a total dividend amount of 11.07 billion yuan and a dividend rate of 48%.
Diversified layout was promoted, and domestic and foreign sales grew together. By business, the company's air conditioning business achieved a revenue of 131.71 billion yuan in 2021, a year-on-year increase of 14%. According to the industry online data, in 2021, the company's domestic sales of air conditioners increased by 6.8% year-on-year, and the export sales increased by 3.8% year-on-year. The improvement of air conditioning sales promoted the steady growth of the company's air conditioning business revenue. In addition, we speculate that the company's air conditioning price adjustment strategy is effective and the product structure is optimized, which will help the company improve the average sales price of air conditioning and further promote the growth of the company's air conditioning business. In addition, the company accelerated its diversified layout. In 2021, the revenue of the company's industrial products business / intelligent equipment business / green energy business increased by 38.6% / 42.8% / 63.1% to 3.19/8.6/2.91 billion yuan respectively year-on-year, and the revenue proportion of the three businesses increased by 0.9pp to 3.7%. In terms of regions, the company's domestic sales revenue reached 122.31 billion yuan, a year-on-year increase of 10.8%; The export revenue reached 22.54 billion yuan, a year-on-year increase of 12.6%. Domestic and foreign sales made concerted efforts to promote the steady growth of the company's annual revenue.
Profitability is under pressure in 2021. In 2021, the company's comprehensive gross profit margin was 25%, a year-on-year decrease of 2.2pp, of which Q4 gross profit margin was 25.3%, a year-on-year decrease of 10.3pp. We believe that the decline of the company's gross profit margin is mainly due to the adjustment of accounting standards and the continuous rise of raw material prices. In terms of expenses, the company's sales expense rate / management expense rate / R & D expense rate / financial expense rate were 6.1% / 2.1% / 3.3% / - 1.2% respectively, the sales expense rate / R & D expense rate decreased by 1.5pp/0.2pp respectively year-on-year, and the management expense rate / financial expense rate changed slightly. Overall, the company's net interest rate was 12.2%, a year-on-year decrease of 1.1pp.
Q1 profit is relatively stable. In the context of the continuous sharp rise in the price of raw materials in the first quarter, the profitability of the company remained relatively stable. In 2022q1, the gross profit margin of the company was 24.3%, a year-on-year decrease of 0.9pp, and the decline of gross profit margin narrowed. In terms of expenses, the company's sales expense rate / management expense rate / R & D expense rate / financial expense rate are 5.5% / 3.5% / 3.7% / - 1.6% respectively. Overall, the company's net interest rate was 10.2%, a year-on-year decrease of 0.2pp. On the whole, the decline of the company's gross and net profit margin narrowed, showing a certain improvement trend. In the future, with the stabilization of raw material prices and considering the company's strong industrial chain position, it is expected that the profitability of the company will accelerate the repair.
Strengthen new retail operations and revitalize channels. In 2021, the live broadcast of "Gree Dong Mingzhu store" ushered in explosive development, forming a live broadcast network red matrix represented by "Miss Dong" and "Yutong". In addition, Gree's online sales have achieved rapid growth by organizing live broadcast activities with China Central Television, expanding new media publicity channels, enriching the product lines of various categories of household appliances, and comprehensively arranging new energy-efficient products. The company adheres to the digital operation thinking, and the online is the offline drainage, which makes the channel burst out stronger sales energy. In addition, in 2021, Gree e-commerce company's supply chain has formed a warehouse network layout covering the whole country, and promoted the digital transformation of order management process to provide sufficient support for terminal channel sales.
Profit forecast and investment suggestions. It is estimated that the company's EPS from 2022 to 2024 will be 4.57 yuan, 5.27 yuan and 6.04 yuan respectively. The net profit attributable to the parent company will maintain a compound growth rate of 15.7% and maintain the "buy" rating in the next three years.
Risk warning: the price of raw materials may fluctuate sharply and the terminal demand is less than expected.
