What happened: the company released its first quarterly report in 2022. During the reporting period, the company achieved revenue of 680 million yuan, down 4.2% from the same period last year, while the net profit lost 1.3796 million yuan, down 103.43% from the same period last year.
The suspension of production caused an increase in fixed costs and led to a decline in gross profit margin. During the reporting period, the company's comprehensive gross profit margin was 22.05%, down 5.54% from the same period last year and 2.63% from the previous month. The company's gross profit margin fell sharply, mainly because of the outbreak of a large-scale epidemic in Hebei and the suspension of production at the company's Tangshan base, resulting in an increase in fixed costs. It is expected that with the improvement of the epidemic in the future, the company's gross profit margin will be repaired gradually.
The expense rate has increased, and the net interest rate has dropped sharply compared with the same period last year. The expense rate during the company period was 26%, an increase of 2.5% over the same period last year. Among them, the rate of sales expenses was 10.28%, an increase of 0.58% over the same period last year; the rate of management expenses was 9.48%, an increase of 0.5% over the same period last year; the rate of financial expenses was 1.24%, an increase of 1.31% over the same period last year; and the rate of R & D expenses was 5%, an increase of 0.12% over the same period last year. In terms of net interest rate, due to the sharp decline in gross profit margin and the increase in expense rate, the company's net profit rate during the reporting period was-1.19%, down 7.19% from the same period last year, and 1.22% from the previous month.
Multi-channel enables domestic sales, while foreign sales go against the trend. In terms of domestic sales, the company comprehensively distributes retail, assembly and engineering channels: in terms of retail channels, the company speeds up the construction of specialty stores, optimizes the dealer system, and continuously strengthens retail capacity; in terms of integration channels, the company focuses on head decoration enterprises such as Shi Jia Decoration, giving priority to starting home decoration business in core cities; in terms of engineering channels, the company implements the "1x 5" engineering base model, binding high-quality real estate developers such as Country Garden Holdings. In terms of foreign sales, the company focuses on major customers in key markets such as the United States and Canada, while actively developing new customers such as Peru. By the end of 2021, it has obtained product certification in 17 countries or regions and 5 factory certification.
Investment suggestion: the company has excellent R & D strength, high product power, increasingly perfect channel layout, coordinated development of domestic and foreign sales, and is expected to continue to grow in the future. The company is expected to achieve EPS 1.05 / 1.26 / 1.48 yuan per share in 2022-23-24, corresponding to PE of 7X / 6X / 5X, maintaining the "recommended" rating.
Risk hint: the risk that economic growth is less than expected; the risk of intensified market competition.