The results in the first three quarters of 2021 are in line with market expectations.
The company announced the results for the third quarter of 2021: the income in the first three quarters of 2021 was 2.723 billion yuan, an increase of 50.4% over the same period last year, the net profit loss of return to the mother was 190 million yuan, and the loss of non-return net profit was 184 million yuan, which was in line with market expectations. we expect that the short-term performance will be affected mainly by the investment in store construction and local epidemics and floods.
From a quarterly point of view, the company's 1Q/2Q/3Q21 achieved revenue of 4.89 million yuan and 952 million yuan, respectively, compared with the same period last year. + 152.4%, 93.0%, 0.03%, respectively, and the net profit returned to its mother was-2.20 pounds, 0.92 million yuan, respectively, compared with the same period last year.
Development trend
1. Q3's income is basically flat, while its profit is at a loss. The company's 3Q21 revenue decreased by 0.03% compared with the same period last year, and the company's net profit was 62.18 million yuan (compared with 32.26 million yuan in the same period last year). This was mainly due to the company's strengthening brand construction, promoting the upgrading of the store, the continuous expansion of investment in the early stage, and the repeated impact of torrential rain and epidemic conditions in some areas on the normal construction period, resulting in pressure on the profit end.
2. The gross profit margin has declined, and the internal efficiency has been used to digest the cost pressure. The company's gross profit margin in the first three quarters of 2021 was 30.6%, down 2.6ppt from a year earlier. On the expense side, the company's expense rate during the first three quarters was 35.4%, a year-on-year decline of 8.8ppt, of which the sales / management + R & D / financial expense rate was 20.5%, 14.3%, 0.7%, respectively, and-5.1/-4.4/+0.7ppt, respectively. Under the combined impact, the net interest rate in the first three quarters was-7.0%, an increase of 4.8ppt over the same period last year.
3. All kinds of business are advancing steadily, and the performance of receiving orders keeps growing. In terms of business, the company signed a total of 4.379 billion yuan in unfinished orders in the first three quarters of 2021, an increase of 8.5% over the same period last year, of which the home decoration / Seiko / public wear business was 33.65 and 624 million yuan respectively, an increase of 0.5%, 126.7% and 21.4% respectively over the same period last year. In the third quarter, the company signed a new order of 1.046 billion yuan, an increase of 0.5% over the same period last year, of which the home decoration / Seiko / public dress business was 8.72 million yuan, respectively, and-7.9%, 12.7%, 116.3%, respectively, compared with the same period last year. The company continues to strengthen its supply chain and delivery capacity, actively explore solutions to pain points in the industry, and build a product and service system for the whole process of home decoration. We are optimistic about the rapid growth of the company's Seiko and official clothing business.
Profit forecast and valuation
Considering that the company is still in the adjustment period, we have lowered the 2021 Universe earnings forecast of 19% per share in 2022 by 17% to 0.43 cyber 0.50 yuan per share. The current share price corresponds to the 14 times / 12 times earnings ratio of 2021 Universe in 2022, maintaining the outperforming industry rating, lowering the target price by 12.5% to 7 yuan, and corresponding to the 16 times / 14 times earnings ratio of 2021 Universe in 2022, there is 18% upside space.
Risk
Raw material prices fluctuated sharply, and real estate regulation exceeded expectations.