\u3000\u3000 Huafu Fashion Co.Ltd(002042) (002042)
It is estimated that the net profit attributable to the parent company in 21 years will be 550 million yuan ~ 630 million yuan, and the loss will be reversed year-on-year
The company issued a performance pre profit announcement. It is expected that the net profit attributable to the parent company will be 550 million yuan to 630 million yuan in 2021, reversing the loss year-on-year; The non net profit deducted is RMB 330 million to RMB 410 million, which is expected to turn around the loss year-on-year. The net profit attributable to the parent in 21q4 is expected to be RMB 110 million to RMB 190 million, which is expected to turn around the loss year-on-year. The non net profit deducted in 21q4 is expected to be RMB – 9 million to RMB 71 million, which is expected to narrow or turn around the loss year-on-year.
In 2021, we will benefit from 1) the continued restorative growth of global clothing consumption, the better control of the epidemic in China, the steady recovery of the market and supply chain, the repeated epidemic in South and Southeast Asia, and the return of some overseas orders to China; 2) The price fluctuation of raw materials is superimposed upward, the capacity utilization is improved, the gross profit margin of products is increased, and the company’s profit is increased.
Set up subsidiaries, lay out clean energy industry and promote sustainable development strategy
Recently, the company invested 100 million yuan to establish Aksu Huafu new energy Co., Ltd. to coordinate the energy development and management of the company’s production bases, further reduce the power cost and ensure the power reserve and supply. Starting from the distributed photovoltaic project, Huafu new energy realizes the clean use of energy for production and office in the plant, makes full use of the lighting and location advantages of Xinjiang, plans and develops centralized photovoltaic projects, actively promotes the construction of clean energy and creates green economic benefits. This investment will help the company integrate resources, reduce costs, increase benefits, and bring value to the future carbon emission competitiveness of the company’s products.
Deep cultivation, internal circulation, landing, and active transformation of industrial Internet
The landing industrial Internet project effectively improves the operation efficiency of the company and even the whole industry, and opens up the space for long-term growth. The company practices the industrial Internet thinking, opens up the front-end cotton industry, realizes the cost reduction and efficiency increase of digital intelligence manufacturing, makes full use of its own advantages such as orders, brand premium and raw materials, outputs digital solutions to the industry, integrates enterprises and provides value-added services.
Give consideration to the external circulation, extend the back-end ADA socks industry and create a new growth curve
Extend the back-end network chain to establish ADA socks industry, and the company is expected to break through the traditional socks track. The company extends from yarn to Hosiery Industry, seizes the vacancy opportunity of China’s medium and high-end hosiery products, takes its own brand and OEM as its core business, and is engaged in brand authorization and yarn management at the same time. It has significant advantages of vertical integration and cooperates with the main industry to create a new growth curve of the company.
Raise the profit forecast and maintain the buy rating. Huafu Fashion Co.Ltd(002042) it is mainly engaged in color spinning and connects the textile and clothing industry with yarn. In the future, with the upgrading and expansion of the company’s production capacity, the improvement of demand, the integration of waist yarn mills and the positive trend of rising cotton prices, profits are expected to be released quickly. The company issued the announcement of 21-year earnings forecast. We raised the net profit attributable to the parent company from 21 to 23 to 580 million, 660 million and 760 million yuan (the original value was 530 million, 630 million and 740 million yuan), and the corresponding P / E was 13, 11 and 10 times (the original value was 16, 13 and 11 times) respectively.
Risk tip: the price fluctuation of raw materials, the repeated epidemic situation and the order fluctuation caused by the game between China and the United States. The performance forecast is only the preliminary accounting result, and the annual performance announcement shall prevail
