Items:
The company released its annual report for 2021, with operating income of 3.89 billion yuan in 2021, an increase of 21.0% over the same period last year, and net profit of 240 million yuan, down 23.4% from the same period last year. Realize basic earnings per share of 0.62 yuan. Single Q4 realized operating income of 1.05 billion yuan, an increase of 6.7% over the same period last year, and its net profit was 9 million yuan, down 88.6% from the same period last year.
Comments:
Under the disturbance of many factors, the profit side is under short-term pressure. The net profit deducted from non-return in 2021 was 160 million yuan, down 38.05% from the same period last year. 1) the gross margin end. The gross profit margin in 2021 was 27.7%, down 3.7pct from the same period last year, mainly due to the decline in gross profit margin of export business due to the appreciation of RMB against the US dollar (24.3% gross profit margin abroad, down 4.0pct from the same period last year), social security relief in the same period, year-on-year rise in fuel power prices and trial production of smart home (Chongqing) and other factors. In the long run, with the gradual maturity of channel construction, refined management and operation and upgrading of product structure, and the increase in the proportion of ceramic tiles, smart homes and overall kitchen and bathroom with relatively high gross profit margin, we expect profitability to continue to improve in the future. 2) the fee side. Fees increased by 22.48% in 2021 compared with the same period last year. Of this total, sales expenses were 320 million yuan, an increase of 21.9% over the same period last year, mainly due to increased investment in marketing channel construction; management expenses were 290 million, an increase of 31.6% over the same period last year, mainly due to increased investment in echelon construction of management personnel and management informatization and standardization; R & D investment was 170 million, an increase of 23.9% over the same period last year, mainly due to increased investment in research and development of new products and new processes.
Channel expansion continues to move forward, and retail channels continue to be ploughed. In 2021, retail channel revenue was 2 billion yuan, an increase of 25.8% over the same period last year, accounting for 52.1% of the main business income; engineering channel revenue was 870 million yuan, an increase of 5.7% over the same period last year, accounting for 22.6% of the main business income; and foreign sales revenue was 970 million yuan, an increase of 25.4% over the same period last year, accounting for 25.3% of the main business income. On the retail channel, on the one hand, speed up the construction of specialty stores. In 2021, the company opened and adjusted 350 new stores and completed the upgrading and transformation of 240 stores. As of December 31, 2021, the company has 2077 stores in China, including 1257 stores for "HUIDA" brand bathroom products; on the other hand, it continues to optimize the dealer system, actively introduce high-quality dealers, and strengthen dealer capacity through policy support, KA assistance and other measures.
Intelligent bathroom and overall kitchen and bathroom become the new driving force for growth. From 2016 to 2020, the market size of smart home in China increased from 260.85 billion yuan to 514.47 billion yuan, CAGR18.5%. Intelligent toilet and other intelligent bathroom products have gradually become a rigid demand. With the upgrading of consumption and the improvement of R & D capacity, the growth of smart bathroom and overall kitchen and bathroom market may accelerate. In 2021, the company's sanitary ceramics business income was 1.94 billion yuan, an increase of 15.57% over the same period last year, accounting for 50.41% of the main business income. Of this total, the income from intelligent sanitary ware was 410 million yuan, up 44.59% from the same period last year, while the overall income from kitchen and bathroom was 90 million yuan, an increase of 233.27% over the same period last year.
The channel is becoming more and more mature, intelligent and integrated products open room for growth and maintain a "strong push" rating. The company's channel expansion is smooth, intelligent bathroom and the overall kitchen and bathroom growth momentum is strong, long-term performance growth is expected. We estimate the company's 2022-2024 net return profit of 40,000,50,60,000,000 yuan (22,000,000 yuan before 23 years), and the corresponding share price PE is 8-6-5 times. Using the DCF valuation method, the company is given a target price of 11.9 yuan per share, corresponding to 12 times PE in 2022, maintaining a "strong push" rating.
Risk tips: the price of upstream raw materials continues to rise; the development of new business is not as expected; the prosperity of real estate is declining.