1H21's performance is in line with our expectations.
The company announced half-year 2021 results: 1H21 achieved income of 3.563 billion yuan, an increase of 40.3% over the same period last year, a net profit of 302 million yuan, an increase of 90.4% over the same period last year, and a non-return net profit of 272 million yuan, an increase of 89.6% over the same period last year. The performance is in line with expectations, the company actively innovates marketing models, constantly improves brand value, and the business continues to develop.
In a single quarter, the company's 1Q/2Q21 achieved revenue of 14.10 / 2.154 billion yuan respectively, an increase of 86.8% and 20.6% respectively over the same period last year, and the net profit of its parent was 0.71 / 231 million yuan, an increase of 227.9% and 7.8% respectively over the same period last year.
Development trend
1. Focus on brand building and rapid repair of business performance. Excluding the low base impact caused by the epidemic in 2020, 1H21 revenue increased by 15.6% compared to 1H19, and net profit from home increased by 53.2% compared with 1H19, of which 1Q/2021 income increased by-0.2% and 72.4% compared with 1Q/2Q19, respectively, by-0.2% and 72.4%, respectively.
2. To adapt to the market and strengthen cost control, profitability remains stable. The company's 1H21 gross profit margin decreased by 29.1% compared with the same period last year, which was mainly due to the transfer of contract-related transportation and installation expenses from sales expenses to operating costs under the new accounting standards. if the 1H21 gross profit margin was calculated in the original caliber, the 1H21 gross profit margin was 35.9%, slightly lower than the 0.2ppto expense end last year, the company optimized its internal management, and the expense rate during the 1H21 period was 19.1%, down 9.4ppt from the same Among them, the sales / management + R & D / financial expense rates are 7.9%, 10.6% and 0.6%, respectively, and the year-on-year rates are-7.4/-2.0/-0.1ppt. Under the combined influence, the company's 1H21 net interest rate is 8.5%, an increase of 2.2ppt over the same period last year.
3. Green development empowers superior products and innovative marketing strengthens brand power. 1) Product end: the company adheres to the development strategy of green industrial chain, takes environmental protection as the banner, increases the research and development of new products, improves the quality of core products, strengthens the quality of after-sales service, and effectively enhances market competitiveness. 2) Marketing end: the company's marketing network is spread all over the country, with nearly 3000 unified stores up to now, and actively embrace new online retailers such as Tmall, JD.com, Douyin, etc., while working with national tennis players to enhance brand awareness and thicken brand value; 3) production side: the company has gradually formed a large-scale production capacity layout with Jiangsu, Guangdong and Jiangxi production bases as the center, with a total annual output of 80 million m up to now.
Profit forecast and valuation
We maintain the 2021 / 2022 earnings per share forecast of 1.42 yuan / 1.63 yuan, the current stock price corresponds to 9 times / 8 times earnings ratio in 2021 / 2022, maintains an outperforming industry rating and target price of 16 yuan, corresponds to 11 times / 10 times earnings ratio in 2021 / 2022, and has 22% upside space.
Risk
The price of raw materials fluctuates sharply, and the competition in the industry intensifies.
