Event: in 2022, the company H1 achieved operating income of 694 million yuan, year-on-year + 23.85%, net profit of 53 million yuan, year-on-year-18.77%; of which 2022Q2 realized operating income of 406 million yuan, + 31.05%, and net profit of 38 million yuan, + 14.8%.
The contract manufacturing of the whole machine is gradually expanding, and the income of the traditional business is declining.
By category, 22H1 clean electrical hoses and accessories revenue of 311 million yuan, year-on-year-33.5%, clean electrical equipment revenue of 380 million yuan, year-on-year 311.8%, the company's OEM business significantly improved compared with the same period last year.
In the first half of the year, due to the influence of the overseas macro environment, the sales of hoses and accessories in the company's traditional core business had a certain impact. According to the income disclosure of the subsidiary, the revenue of Vietnam and Suzhou Kaihong decreased by 67.5% and 2.5% respectively compared with the same period last year; in terms of OEM, 21H1 is still in the customer introduction stage and has not yet been released, so it has a big increase compared with the same period last year. The sales of floor washing machine category terminals are better to drive the growth of the company's OEM. Taking one of the major customers as an example, the turnover of 22H1 is 180 million yuan, an increase of 689.97% over 21H2. According to subsidiaries, the revenues of Vietnam and Suzhou Shangteng were 48.2% and 542.8% respectively compared with the same period last year.
The decline of high gross margin traditional business has led to a decline in gross profit. Foreign exchange contributes to the single-quarter profit of H1 company in 2022, the gross profit margin is 15.94%, year-on-year-8.7pct, net profit rate is 8.02%, year-on-year-3.35pct; 2022Q2 gross profit margin is 16.3%, year-on-year-7.25pct, net profit rate is 9.36%, year-on-year-0.91pct. According to the category, the gross profit margin of 22H1 cleaning electrical appliances hoses and accessories / clean electrical appliances is 25%, 9%, respectively, year-on-year-1.7/-6.2pct. The decline in the company's profit level compared with the same period last year was mainly due to the decrease in revenue from hoses and accessories with high gross margin, while the continued high operation of raw material prices, labor costs and investment in research and development, increased depreciation and other factors caused 22H1 to deduct non-net profit of 48.808 million yuan,-23.39% of the same period last year. From the point of view of the molecular company, the profit situation of the whole machine foundry continues to improve. The net interest rate of the hose and accessories factory in 22H1 Malaysia and Vietnam is negative, while the net interest rate of the whole machine foundry is positive. In particular, the net interest rate of Suzhou Shangteng foundry has changed from negative to positive, achieving a net interest rate of 1.8%.
In 2022, the company's H1 sales, management, R & D and financial expense rates were 1.05%, 5.27%, 3.37%,-1.85%, respectively, compared with the same period last year. 22Q2 quarterly sales, management, R & D, and financial expense rates were 0.7%, 4.8%, 3.6%,-3.81%, respectively, compared with the same period last year. Among them, the financial expense rate fluctuates greatly, mainly due to the increase in exchange earnings in the current period.
Investment suggestion: the company's OEM business is gradually expanding in the first half of the year, and the traditional hose and accessories business is greatly affected by the overseas macro environment. Looking forward to the second half of the year, the year-end boost is expected to enable the company to further expand its OEM business, and the overseas macro environment or month-on-month environment will improve in the second half of the year; in terms of cost, the current raw material prices, shipping charges and foreign exchange will make a positive contribution to the company, and we expect the company's revenue performance to improve month-on-month in the second half of the year. Based on the situation reported in 22H1, we appropriately reduce the gross profit margin and revenue growth for 22 years. It is estimated that the company's net profit in 2022-2024 will be 1.45x175,000,000,000 yuan respectively (the previous value is 15,000,600,000,000 yuan); the corresponding dynamic valuation is 14.8x/12.3x/9.6x respectively. Maintain the "overweight" rating.
Risk tips: raw material price fluctuation risk; market competition risk; alternative product risk; exchange rate risk; OEM permeability is lower than expected.