Event: the company released the China report on the evening of August 23, with revenue of 4.206 billion yuan in the first half of 2021, an increase of 42.86% over the same period last year, a net profit of 458 million yuan, a decrease of 24.57% over the same period last year, and a deduction of 367 million yuan in non-net profit, a decrease of 12.10% over the same period last year. Of this total, 2021Q2 achieved revenue of 1.47 billion yuan, an increase of 59.28% over the same period last year, a net profit of 224 million yuan, a decrease of 20.27% over the same period last year, and a deduction of 128 million yuan for non-net profit, an increase of 1.29% over the same period last year.
Comments:
Driven by demand growth, income rose sharply in the first half of the year. Due to the extended leisure time of overseas residents under the influence of the epidemic, the demand for leisure products in family gardens has increased significantly. The company's Q2 income, return net profit and deducted non-net profit have respectively increased by 59% /-20% / 1.3% compared with the same period last year, which is faster than the growth rate of Q1 by 35% /-28% /-18%. In terms of products, the revenue of leisure furniture / sunshade products increased by 37% / 45% to 27.70 / 1.222 billion yuan respectively in the first half of the year compared with the same period last year. Based on the current orders received and intended orders, the company expects orders for the 2021-2022 business year (July 2021 to June 2022) to grow by more than 30 per cent year on year, and high growth is expected to continue in the second half of the year.
The gross profit margin decreased month on month, and the expense rate decreased compared with the same period last year. In terms of gross profit margin, the company's 21Q2 gross profit margin was 10.03%, down 10.70 pct from the previous month, mainly due to rising raw materials and labor costs such as steel, aluminum and plastics. The company mainly implements the FOB price, and the freight is mainly borne by the customers. The company's Q2 net interest rate was 15.20%, an increase of 6.63 pct month-on-month, mainly due to the increase in investment income and fair value change income of transactional financial assets. From the expense point of view, the 21H1 expense rate decreased by 6.86 pct to 6.49% compared with the same period last year, of which the sales / management / R & D / financial rates changed from-3.05 /-0.31 /-0.74 to 3.81% / 3.40% / 1.99% /-2.71% respectively. The decline in sales expenses is mainly due to the fact that freight is included in operating costs under the new revenue criteria. The decrease in financial expenses is mainly due to the increase in exchange gains.
Create a large leisure layout, and plan to promote employee shareholding to bind the interests of core personnel. The company will continue to strengthen brand and cross-border e-commerce investment, based on the existing categories of leisure furniture, gradually extend to the direction of comprehensive home customization, and further enrich the category of leisure household products. In addition, the company plans to promote the employee stock ownership plan in 2021, with no more than 150 employees participating, the transfer price is 0 yuan per share, and the stock is derived from buyback shares of no more than 5 million shares. The plan will fully mobilize the enthusiasm of the core staff.
Profit forecast: the net profit from 2021 to 2023 is expected to be 6.2 / 8.0 / 960 million yuan respectively, and the current stock price corresponding to PE is 13.05 / 10.04 / 8.41x. Cover for the first time, giving a "buy" rating.
Risk hint: overseas demand is lower than expected, raw material prices and exchange rate fluctuations.