Event: Shuhua Sports released its 2021 annual report and 2022 quarterly report. In 2021, the company achieved operating income of 1.562 billion yuan, an increase of 5.25% over the same period last year; net profit of 116 million yuan, down 15.45%; and net profit of 102 million yuan, down 21.52% from the same period last year. Among them, the operating income of 2021Q4 in the current quarter was 473 million yuan, down 8.28% from the same period last year; the net profit was 38 million yuan, down 39.58% from the same period last year; and the net profit after deducting non-return was 35 million yuan, down 40.34% from the same period last year. In addition, in the first quarter of 2022, the company achieved operating income of 278 million yuan, down 13.74% from the same period last year; net profit of 13 million yuan, up 4.30% from the same period last year; and net profit of 11 million yuan, down 12.17% from the same period last year.
Multi-dimensional sports scene coding layout, intelligent upgrade empowering product power
In terms of products, the company's income from indoor fitness equipment, display supplies and outdoor fitness paths in 2021 was RMB 9.71 million, an increase of 0.85%, 35.94% and 9.10% over the same period last year. The company actively promotes the upgrading of various sports scene system solutions and seize the opportunity for the development of national fitness. 1) in the field of indoor fitness for all, the company undertook the construction of more than 600 gymnasiums in 2020-2021. 2) in the field of sports park, the company undertakes to build the sports park on the right bank of Bahe River in Shaanxi Province, which provides a diversified template for the follow-up promotion of sports park. 3) in the field of competitive sports, as the official fitness equipment supplier for the Beijing 2022 Winter Olympic Games and Paralympic Games, the company provides scientific fitness equipment for the fitness centers of the three Winter Olympic villages to further improve the influence of the brand.
At the same time, the company actively promotes the process of product intelligence. Shuhua Sports APP currently has core functions such as courses, live streaming, training plans and communities, which deeply match the fitness needs of users. In May 2021, the company, together with Huawei at the Sports Expo, released the "Jizhi II luxury Commercial treadmill" with Hongmeng operating system, realizing a key breakthrough in the Internet of things in the field of sports and health. the follow-up company will promote product iteration and innovation on this basis.
The offline channel is expanding steadily, and the e-commerce channel is outstanding.
In terms of different channels, the company's revenue from direct sales, distribution and export channels in 2021 was RMB 884 million, an increase of 10.57%, 13.45% and 22.31% over the same period last year. The company expands its channels with the marketing strategy of "ToC+ToB+ToG". 1) in terms of distribution channels, by the end of 2021, the company has more than 230dealers, covering all levels of markets in various forms such as specialty stores, stores in shopping centers and so on. 2) in terms of e-commerce channels, the company has opened direct flagship stores in Tmall, JD.com, Vipshop Holdings Limited and other platforms, and added Douyin online sales model to sell indoor fitness products. In 2021, Shu Hua ranked first in the industry in the category of middle and high-end treadmills worth more than 3000 yuan by JD.com, while sales of motor bikes, elliptical machines and other car products on JD.com platform increased by 78% compared with the same period last year. In Tmall's ranking of large-scale fitness equipment, Shuhua brand sales are at the forefront, with exercise bike sales up 39% from a year earlier. 3) in terms of government procurement business, the company mainly sells outdoor path products and some indoor fitness equipment products to customers such as sports bureaus, government departments and enterprises and institutions. Benefiting from the trend of national fitness, ToG business is expected to advance steadily with the bidding procurement process.
The rise of raw materials suppresses the profit space, and the cost control in 21 years is relatively good.
The company's comprehensive gross profit margin in 21 years was 28.20%, a year-on-year decline of 2.20pct, mainly due to the rise in the price of raw materials. 22Q1's comprehensive gross profit margin was 29.04%, an increase of 3.00pct over the same period last year. In terms of period expenses, the 21-year period expense rate was 17.36%, a slight increase in 0.20pct compared with the same period last year, and the sales / management / R & D / financial expense rate was 8.19% 6.74%, 2.22%, 0.21%, respectively, and + 0.87/+0.04/+0.001/-0.71pct, respectively, compared with the same period last year. The decline in financial expense rate is mainly due to the early repayment of loans and the reduction of loan size. The increase in the rate of sales expenses is mainly due to the increase of related expenses in order to match the growth of sales business. The expense rate of 22Q1 during the period was 21.82%, an increase of 3.66pct over the same period last year. Under the combined influence, the 21-year net interest rate of the company was 7.41%, down 1.82% from the same period last year. The net interest rate of 22Q1 company was 4.78%, an increase of 0.83pct over the same period last year.
Investment suggestion: the company will accelerate the expansion of ToC+ToB+ToG channel layout and provide intelligent solutions for the whole scene of fitness. Under the background of the continuous landing of domestic fitness policies, the company's market share is expected to further increase. We estimate that the operating income of Shuhua Sports in 2022-2024 will be 19.32,22.78 and 2.681 billion yuan, an increase of 23.69%, 17.91% and 17.69% over the same period last year. The net profit of homing was 1.65,1.97 and 241 million yuan, up 42.70%, 19.04% and 22.63% over the same period last year, corresponding to PE 23.0x, 19.3x and 15.8x. Considering the uncertainty of repeated epidemic and raw material price fluctuations, it was given an investment rating of-A.
Risk tips: display shelf product customers relatively concentrated risk; raw material price fluctuation risk; exchange rate fluctuation risk.