Report guide
22Q1 has maintained stable operation and steady growth in sales under the fluctuating market environment, is currently in the climbing period of new production capacity, and is optimistic about the continuous increase in overseas market share.
Main points of investment
22Q1 sales are growing steadily, and gross profit margin is relatively under pressure.
Announced the release of the first quarterly report of 2022: 22Q1 achieved operating income of 114 million (year-on-year + 23.5%), net profit of 19.53 million yuan (+ 8.1%), and non-net profit of 19.29 million yuan (+ 3.2%).
Gross margin pressure is mainly affected by raw material price fluctuations and capacity climbing. 22Q1's gross margin is 33.79% (- 4.27pct) and net profit is 17.21% (- 2.44pct). We believe that the decline in gross profit margin is mainly due to: 1) the price of raw materials has risen more since the beginning of the year, although the company's stock cycle and order delivery cycle are both 1-2 months, but in order to maintain the strategic partnership, the frequency and range of sales price adjustment may be lower than the fluctuation of raw material prices; 2) the current production capacity is in a climbing period, and the output efficiency in the commissioning phase of new equipment is relatively low.
The expense rate during the 22Q1 period increased by 1.70pct to 16.47% compared with the same period last year. The sales expense rate of 22Q1 company is 7.42% (+ 3.50pct), mainly due to the development of the "Ximen" independent brand, the development of new retail business of sunshade products and software, and the increase of corresponding sales staff and advertising expenses; while the management expense rate dropped to 5.91%, showing the improvement of the company's scale effect. The company continues to increase R & D investment and enhance the competitive advantage of product differentiation, with a current R & D expenditure rate of 4.36% (+ 0.23pct).
Since the beginning of the year, the company's business activities have been relatively stable under the influence of various aspects. As the company's overseas market positioning is mainly in the Americas and Southeast Asia, while the European market accounts for a relatively small share, the order side is relatively less affected by the conflict between Russia and Ukraine. In addition, the company mainly shipments from Ningbo port, the overall logistics is smooth, the delivery time is relatively stable.
Enter the period of rising production capacity and be optimistic about 22 years of sustained growth.
It has the logic of "domestic penetration + overseas market share" for a long time. Functional sunshade materials have a strong substitution trend for traditional cloth curtains, but the current domestic permeability is only 3%, which has a large gap with 80% in Europe and the United States, and has a broad long-term space; in addition, the company has leading design and development capability. with customized production capacity and integrated industrial chain, it is expected to gradually increase overseas market share by virtue of its high performance-to-price advantage.
The new production capacity reached production at the end of the year and is currently full of orders on hand. The main plant of the company's fund-raising project has been basically completed and has been put into production one after another. it is expected to reach production by the end of 22 and will increase the production capacity of 16.5 million square meters of sunshade fabrics and 2 million square meters of sunshade products. At present, the company has been ordering for 3-5 months, the capacity utilization is full, and it has established cooperative relations with HunterDouglas, Vertilux and other international well-known customers, and is expected to have a strong growth momentum for the whole year. In addition, the company's new software business will be launched this year, which is worth looking forward to.
Profit forecast and valuation
It is estimated that the company's net profit for 22-24 years will be 1.1 billion yuan, respectively, with a corresponding growth rate of 22%, 30%, 30%, and the current market value is 16 PE, 12 max, 10 X. Ximen, as a leading enterprise of domestic functional sunshade materials, will benefit from the improvement of "domestic penetration + overseas market share" for a long time, and its future growth will enter an accelerated period. We believe that there is room for Ximen's current valuation to rise and maintain its "buy" rating.
Risk hint
The price of raw materials fluctuates; the epidemic situation repeatedly leads to the restriction of production and logistics; the development of new business is not as expected.