\u3000\u3 China Vanke Co.Ltd(000002) 745 Mls Co.Ltd(002745) )
Event:
The company released the first quarterly report of 2022, realizing an operating revenue of 3.995 billion yuan, a year-on-year increase of - 10.70%; The net profit attributable to the parent company was 182 million yuan, a year-on-year increase of - 38.65%; Net profit deducted from non parent company was 173 million yuan, with a year-on-year increase of - 36.50%. The company released its annual report for 2021, with an operating revenue of 18.615 billion yuan, a year-on-year increase of 7.10%; The net profit attributable to the parent company was 1.159 billion yuan, a year-on-year increase of 284.10%; Net profit deducted from non parent company was 1.053 billion yuan, with a year-on-year increase of 279.68%.
Comments:
Affected by the overseas situation and the epidemic situation in China, the performance of 22q1 declined. The sales of the company's landvance brand are mainly in Europe, and the situation in Russia and Ukraine has a certain impact on demand. Covid-19 epidemic occurred in Shenzhen and Shanghai in the first quarter, which affected the company's relevant sales and raw material transportation, adversely affecting the sales revenue and gross profit margin. At the press conference on epidemic prevention and control in Shanghai held on May 17, 2022, Zhao Dandan, deputy director of Shanghai Municipal Health Commission, introduced that at present, the social aspects of 16 districts in Shanghai have been fully cleared. In the future, with the gradual mitigation of the epidemic, the company's product sales and raw material transportation in Shanghai will be gradually improved. At the same time, the company actively strengthens the channel and brand construction, increases the promotion of miniled and other high-end LED products, and is optimistic about the long-term development prospect of the company. Continuously improve the competitiveness of enterprises and achieve new heights in business performance. In 2021, the company always focused on the development of its main business, accurately analyzed and judged the market situation, deployed in advance, and gave full play to the synergy and production scale effect of various business segments. The company maximizes the release of manufacturing capacity, adheres to the incremental demand of the downstream market and actively strives for the stock market share. The continuous improvement of the company's capacity utilization and production and marketing rate has ensured the stability of the company's market share, further improved the company's brand influence and product profitability, and achieved the best business performance over the years. In addition, with the increasing trend of industry concentration, the company's core competitiveness such as strategic layout, brand channel advantages, large-scale manufacturing capacity and industry leadership become more prominent.
The integration plan and measures such as cost reduction and efficiency increase have achieved remarkable results. In 2021, the overall operation quality and internal synergy of landvance, an overseas subsidiary, improved steadily. The company continued to carry out in-depth integration in brand, channel, R & D, production and operation, global supply chain and other aspects, and the synergy effect of industrial chain continued to release, which not only maintained the advantage of industrial chain, consolidated the brand influence, but also ensured the sustainable profitability of the company. In 2021, the company's interest bearing liabilities, asset liability ratio and accounts receivable decreased. By improving the level of financial management and scientifically controlling costs and expenses, the company has achieved remarkable results in reducing costs and increasing efficiency.
I. landvance brand:
The company has completed the preliminary integration of landvance business and established an overseas brand system represented by "landvance". The company has gradually improved the direct selling network and distributor system of landvance brand. In 2021, landvance has trade and retail channels covering more than 140 countries and regions around the world. The company has maintained long-term and stable cooperative relations with trade channel customers such as imelco, Rexel and sonepar, as well as large commercial supermarkets and retail channel customers such as Wal Mart, Metro and Bauhaus. Landvance has been deeply engaged in the European and American lighting market for many years, has a strong brand international influence and perfect global marketing channels, and leads the industry trend of intelligent and healthy lighting products in the wave of intelligence. "Landvance" and its global well-known brand products such as "xiwannian", "radium" and "Dulux" are mainly positioned in the high-end light source and smart home application market. The products cover home and office lighting, industrial lighting and industrial lighting system, smart home business and health lighting. In 2021, landvance brand products achieved an operating revenue of 10.217 billion yuan and a gross profit margin of 39.08%.
II. Mls Co.Ltd(002745) brand:
" Mls Co.Ltd(002745) " brand in the field of LED lighting, after more than 20 years of fine operation and accumulation, has formed a well-known brand in the industry and won the honors of "top ten brands in China's lighting industry", "top ten annual brands", "top ten packaging brands" and "top ten home lighting brands" of Guangming award. The company actively builds an online marketing team, introduces outstanding talents in the industry, expands sales channels through e-commerce platforms such as tmall and jd.com, improves Mls Co.Ltd(002745) brand influence and improves the company's sales revenue. Relying on its strong R & D capability and profound technological accumulation, the company began to seek a breakthrough in high-end lighting application products in the lighting ecological chain, and made an in-depth layout in the LED subdivision field with high added value, high magnitude and high growth. At present, on the basis of consolidating the traditional LED lighting, the company focuses on new businesses and products such as plant lighting, air purification business, deep ultraviolet LED chips and devices and silicon-based yellow LED, and continues to expand the product system of " Mls Co.Ltd(002745) " brand and improve its comprehensive value. In 2021, Mls Co.Ltd(002745) brand achieved an operating revenue of 1.984 billion yuan and a gross profit margin of 36.48%.
III. intelligent manufacturing business:
The company's intelligent manufacturing business is mainly the midstream LED packaging, and the downstream includes lighting, display, backlight and other fields. The company has been committed to the vertical integration layout of the industrial chain. Through the independent production of PCB board, LED driven IC, bracket, glue, packaging materials, etc., the company has formed a highly competitive cost advantage and synergy advantage at the manufacturing end. By participating in Huai'an Aoyang Shunchang Photoelectric Technology Co., Ltd. and Dejing lighting (Xiamen) Co., Ltd., the two sides formed strategic cooperation to ensure the supply of upstream LED chips and reduce the impact of chip price fluctuations on the company's products. The company's main products include LED small spacing, miniled direct display, miniled backlight, SMDLED and lampLED. In 2021, Mls Co.Ltd(002745) intelligent manufacturing business achieved an operating revenue of 6.007 billion yuan and a gross profit margin of 23.72%.
IV. investment suggestions:
Taking into account the decline in the prosperity of the traditional LED industry, we lowered the company's operating revenue from 2022 to 2023 to 19.545 billion yuan respectively (an adjustment range of - 24.50% compared with the original forecast, the same below) and 21.109 billion yuan (- 31.55%), lowered the company's net profit attributable to the parent company from 2022 to 2023 to 938 million yuan (- 41.99%) and 1.290 billion yuan (- 42.59%), and increased the operating revenue and net profit attributable to the parent company in 2024 to 23.009 billion yuan and 1.632 billion yuan, corresponding to PE of 14x / 10x / 8x respectively.
Considering that the company, as a leading manufacturer of Chinese led brands, actively promotes channel and brand construction and continues to promote the market segmentation of high-end LED products such as miniled, we are optimistic about the long-term development prospect of the company and maintain the "buy" rating.
Risk tip: LED prices are down, miniled applications are less than expected, etc.
