The company released the 2021 annual report, achieving operating income of 7.927 billion, year-on-year + 12.25%, net profit of 458 million yuan, year-on-year + 4.34%, compared with the same period in 2019 + 58.61%. The company released its quarterly report for 2022, 1Q22 achieved operating income of 1.584 billion, year-on-year-23.70%, net profit of 28 million yuan,-73.46% year-on-year. Since 21H2, the local epidemic has repeatedly superimposed high raw material / shipping prices, exchange rate fluctuations, short-term pressure on corporate profitability, and a significant decline in gross profit margin and net profit margin. The recent depreciation of the RMB exchange rate has accelerated, and the company is expected to benefit from the repair of revenue and gross profit margin. In the long run, it is expected that the company's double growth main business will still benefit from accelerated penetration + share increase.
The cost pressure is prominent, and the performance continues to be under pressure. In 2021, the company's income was 7.927 billion yuan, + 12.25% compared with the same period last year, and the net profit returned to the mother was 458 million yuan, + 4.34% compared with the same period last year; of which 21Q4 realized income of 2.1 billion yuan,-8.78% from the same period last year, 43.25% from 19Q418; and net profit from home was 153 million yuan, + 24.20% from the same period last year, compared with 84.97% with 19Q419. In 2021, the focus of the company's growth returned to health care massage, accounting for 69.35% of the revenue, and the domestic business continued to grow steadily, but the epidemic in Xiamen in September led to the hindrance of production, the superimposed high prices of raw materials, and the export business was subject to tight shipping. 21H2 operation was significantly under pressure. 1Q22 achieved operating income of 1.584 billion, year-on-year-23.70%, net profit of 28 million yuan, year-on-year-73.46%, mainly due to cost pressure and the continuation of shipping tension.
Gross profit margin has declined significantly, and the recent devaluation of the RMB is expected to lead to profit repair. In 2021, the company achieved a gross profit margin of 29.9%, a year-on-year of-6.1pcts; a net profit margin of 5.8%, a year-on-year net profit of 5.8%, a year-on-year gross profit of 28.8%, a year-on-year 4.3pcts, and a decline in profitability, mainly due to the impact of high raw material / shipping prices and RMB appreciation.
The rate of sales / management / R & D expenses in the first quarter was + 1.1pcts/+0.7pct/-0.1pct, respectively, compared with the same period last year, and finally achieved a net return rate of 1.8%, year-on-year-3.3pcts. The recent accelerated devaluation of the RMB is expected to benefit the company, driving revenue and gross profit margin repair. In the long run, considering that the company will continue to build its own brand, the profitability will continue to improve, and the trend of profit improvement in the future will be more certain.
The tension of shipping for export continues to be disturbed, and the domestic business is under short-term pressure. On the export side, the shortage of containers and high freight charges continue to affect export earnings, but they have been alleviated. In terms of domestic sales, the company adheres to the dual-brand operation of "OGAWA ao Jiahua + ihoco easy partner", and the O'Jiahua brand continues to grow steadily. Taobao + Tmall sales for the whole year of 2021 + 50.4% Ihoco brand are in the strategic adjustment period, and the revenue side is still under pressure. In the future, the company will focus on the main business of health care massage, and the growth of domestic independent brands is expected to be good.
Double growth main business long-term benefit industry accelerate penetration + share increase. Health care massage business sector, the company as an industry leader to actively expand production, 2023 production capacity will reach 950000 units, capacity reserves are significantly better than the same industry, while actively building their own brands, the proportion of domestic and foreign sales has increased steadily. In the follow-up, with the continuous promotion of independent brand construction, it is expected to benefit from the accelerated penetration + share of the industry for a long time. In the new wind business sector, the company actively promotes the development of the domestic market and carries out in-depth cooperation with real estate leaders, which will benefit from policy support + penetration in the future.
Risk factors: the company's own brand sales progress is not as expected; the penetration rate of domestic massage chairs is not as fast as expected; raw material costs and exchange rates fluctuate sharply.
Investment suggestion: considering the pressure on the company's profitability under the raw material / exchange rate disturbance, adjust the annual EPS forecast of 2022-23-24 to 0.79max 0.91 shock 1.05 yuan (the original forecast was 0.86pm 1.57 RMB), and the current stock price corresponds to 10.2 PE 8.8max 7.7 times. As the leader of the industry, the company has obvious operating pressure in the short term, but it is still expected to benefit from the double improvement of industry penetration and share in the long run. With reference to the comparable company Rongtai Health, times easy 2022 average PE15x, given 2022 15 times PE, corresponding to the target price of 12 yuan, to maintain the "buy" rating.
