Performance review
1Q22 performance is lower than market expectations.
The company announced 1Q22 results: realized income of 1.323 billion yuan, a decrease of 6.16% over the same period last year, a net profit of-22 million yuan, a year-on-year loss, a deduction of non-net profit of-32 million yuan, a year-on-year loss, which was lower than market expectations, mainly because the epidemic in some areas affected the company's production and shipments. We expect the performance to gradually recover in the future as the impact of the epidemic continues to decrease.
Trend of development
1. The epidemic affects production and supply chain, resulting in a significant decline in the performance of 1Q22. We expect the company's overall order growth from January to February to be good, but due to the impact of the epidemic in some areas, the company's factory production and logistics supply chain have been affected to a certain extent since March. We expect that the company will still be affected to a certain extent in 2Q22, but in the future, as the impact of the epidemic gradually decreases, the company's performance is expected to gradually return to good growth in the second half of the year.
2. The gross profit margin has declined significantly, so pay attention to the repair of profitability. The company's 1Q22 gross profit margin was 22.96%, a decrease of 6.38ppt over the same period last year. 1Q22 sales expense rate is 9.34%, year-on-year reduction of 0.07ppt, management + R & D expense rate of 15.10%, year-on-year increase of 1.89ppt, financial expense rate of 0.39%, year-on-year reduction of 0.19ppt. Under the combined impact, the company's 1Q22 net interest rate is-1.66%, a decrease of 6.70ppt over the same period last year.
3. The category of flooring business is constantly expanding, and the products are continuously upgraded and iterated. 1 product end: the company has a deep insight into customer needs and launches new categories such as sports flooring, outdoor flooring and new decorative wallboards; 2) production side: the company taps potential in various fields, strengthens the integration of production resources, and optimizes allocation, transforming from manufacturing to production intelligence. 3) Marketing side: the company increases marketing innovation, helps the brand of "Holy Image" to be younger, and realizes accurate marketing through intelligent delivery of new media, live broadcast, content operation and other forms.
4. The wood-based panel business should be adjusted continuously and the management and control of each link should be strengthened. The company continues to optimize the internal organizational structure, refine the assessment, reduce procurement costs, and optimize the production process. At the same time, the company actively adjusts the product structure, increases the development and promotion of new products, and enhances the influence of "Daya" wood-based panel products.
Profit forecast and valuation
Taking into account the impact of the epidemic in some areas on household offline consumption, we cut the net profit of 2022lb by 11% to 619 million yuan / 710 million yuan in 2023. The current share price corresponds to the price-to-earnings ratio of 2022 Universe 8 to 7 in 2023. Maintain the outperform industry rating, lowering the target price by 14% to 12 yuan, corresponding to the 2022 pebble price-to-earnings ratio of 11 times earnings in 2023, which has 37% upside compared to the current share price.
Risk.
The impact of the epidemic in some areas, real estate regulation and control exceeded expectations, industry competition further intensified.
