This report is read as follows:
The Q1 epidemic is a drag on performance growth and gross profit margin, but considering that Yunji is accelerating the expansion of orders, and the introduction of several clouds into the war will further promote technology research and development, it is optimistic that new business will achieve faster development.
Main points of investment:
Maintain and increase holdings. The Q1 battalion received 469 million yuan / + 12.97%, and the net profit of 3482.4 million yuan /-9.47% was lower than expected. Maintain the forecast for 2022-24 that the EPS will be 0.62, 0.68, 0.76 yuan, 14, 11, 11, 11, 11, 11, 11, 11, 11, 11, 11, 11, 11, 11, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11%, 11% and 14.9 yuan, respectively.
The epidemic is a drag on Q1 performance growth and a decline in gross net profit margin. 1) the lower-than-expected Q1 performance is mainly due to the impact of the epidemic and the cosmetic packaging business is affected by the rise in the price of raw materials, but the proportion of Q1 in the whole year is not high. In 2019-21, Q1 accounted for 2.8 per cent, 6.1 per cent, respectively. 2) gross profit margin 21.3%/-7.7pct, net profit margin 5.4%/-4.7pct 3) expense rate 28.9%/+5.1pct, mainly due to the increase in financial expense rate due to bank loans and medium-term bills (6.3%/+4.6pct); 4) net operating cash flow of 1711 yuan / + 109%.
The development of Lihe Yunji / digital cloud technology is expected to speed up. 1) Lihe Yunji antiviral material from eliminate virus has the advantages of efficacy persistence / security / broad-spectrum effectiveness. It was previously selected into the scientific and technological epidemic prevention project team of the Winter Olympic Games. So far, it has been used in large stadiums / offices / hotels / banks and other scenes, and more than one million orders have been signed. 2) according to the disclosure of the company, Yunji's new material can be used to produce meltblown cloth for medical masks. The developed hand cream has completed the product testing phase, and if the application growth space is promoted in C or higher; 2) Digital Cloud Technology plans to introduce war investment through capital increase, the introduction of funds will all be invested in the research and development of SaaS cloud platform products, product console, BIM model management system and other products, which will consolidate Digital Cloud's competitive advantage in building / facility digitization.
The strategic path is sorted out clearly and there are many projects in hand. 1) relying on the research institute of Tsinghua University in Shenzhen, with the incubation ability of scientific innovation as the core engine, the company focuses on strategic emerging areas such as new energy and new materials / digital economy, and forms the development concept of "scientific and technological innovation services + strategic emerging industries". 2) the continuous improvement of the market-oriented mechanism will improve the quality and efficiency. 3) continue to invest and incubate in hard science and technology fields such as new materials / digital economy / new generation information technology / intelligent manufacturing / life and health, with many reserve projects on hand, such as refreshing intelligence / Lihehoupu, etc.
Risk tips: the progress and effect of the project is not as expected, the failure of investment incubation and the risk of project exit, etc.