2021 & 1Q22 performance is significantly lower than we expected
The company announced 2021 and 1Q22 results: 1) 2021 income 3.51 billion yuan, year-on-year + 21.3%, return to the mother net profit-89 million yuan, year-on-year-186.2%. Corresponding to 4Q21 income 1.05 billion yuan, year-on-year + 8.6%; return to the mother net profit-94 million yuan, loss enlarged compared with the same period last year. 2) the 1Q22 income is 750 million yuan,-7.4% compared with the same period last year, and the net profit is-27 million yuan,-260.7% compared with the same period last year. 3) the company's 2021 and 1Q22 performance was significantly lower than we expected, mainly due to the lower profitability under the pressure of rising raw material prices.
The growth rate of export sales is under pressure, and the performance of domestic sales is weak: 1) in 2021, the company's export and domestic sales revenue is + 51% and-2% respectively compared with the same period last year. 2H21 is + 40% and-19% respectively compared with the same period last year. Although the annual income growth rate of domestic and foreign sales has improved, the 2H21 growth rate is significantly lower than that of 1H21, and we expect the company's revenue side to remain under pressure as a whole. 2) the traditional dominant channel of the company's domestic sales is Shang Chao, which is greatly affected by the transfer of demand to the online during the epidemic, while the company lags behind in the adjustment of the channel structure, and the online performance is still weak. According to Amoy data and business staff monitoring, online retail sales of Estelle cookware in 2021 / 1Q22 are-27.8% and-20.1% respectively compared with the same period last year, while those of Subor cookware are-10.0% and + 13.3% respectively, and the scale is larger than that of Estelle brand. 3) in addition, the company's 2H21 robot revenue declined significantly, mainly due to fierce competition in the industry, while the company adjusted its business team.
The pressure on the cost side continues, and profitability is still weak: 1) due to the sharp rise in raw material prices, exchange rate fluctuations and the increase in the proportion of exports, the company's gross profit margin in 2021 is year-on-year-3.1ppt 4Q21 1Q22 year-on-year-4Q21. 2) in 2021, the company's sales expenses are-1.2% compared with the same period last year, and the sales expense rate is-3.4 ppt year-on-year; the management expenses are-2.8% year-on-year, and the management expense rate is year-on-year-1.5ppt. 3) the company set aside 13.15 million yuan of credit impairment loss in 2021, mainly due to the rapid growth of export business and the increase in provision for bad debts of accounts receivable. 4) 1Q22 deducts a non-net loss of 44.99 million yuan, although the gap is narrower than that of 4Q21, but the company's profitability is still weak in the period of rapid rise in raw material prices.
Trend of development
1) the cross-border development effect of the company is mediocre. In 2021, the company deducts 14.51 million yuan from the goodwill impairment formed by the merger and acquisition of Soruxin. We expect that after Jiang Chen Intelligence completes the repurchase of the company's 20% shares in Jiang Chen Intelligence, the company will put more resources into the main business. 2) the adjustment of the company's domestic sales channel lags behind its competitors. Although the layout of emerging e-commerce, content e-commerce and O2O business has been strengthened in 2021, the effect of the adjustment has not met the expectations, and the performance of online business still needs to be improved.
Profit forecast and valuation
Considering the cost pressure of raw materials, we cut the net profit by 151% to-50 million yuan in 2022 and introduced net profit of 22 million yuan in 2023 for the first time. Considering the slow recovery of the company's profitability, we expect the company's net profit to return to normal in 2024 and the current share price corresponds to a price-to-earnings ratio of 37.0 times 2024. Maintain a neutral rating and a target price of 7.37 yuan, corresponding to 29.5 times earnings in 2024, with 27.4% downside compared to the current share price.
Risk
The risk of fluctuating market demand and the risk of rising prices of raw materials.
