Event: the company released an interim report on 2022 that in the first half of 2022, the company achieved a total operating income of HK $2.88 billion, an increase of 22.4% over the same period last year, and a net loss of HK $149 million, an increase in the extent of the year-on-year loss.
Continue to launch innovative functional subdivision products + brand power continues to occupy a leading position, full category revenue to achieve growth. In the first half of the year, the company focused on the development of special detergent for sportswear, and continued to strengthen its product portfolio by introducing products with new features and functions, while the star products launched last year, the sale of underwear special detergent and sterilized detergent detergent Changhong, continues to drive up the company's product revenue. In terms of products, due to the stable market prices of the company's products and the increase in consumer demand for subdivided laundry products, the company's operating income for clothing cleaning and care products reached 2.45 billion Hong Kong dollars, an increase of 25 percent over the same period last year. Personal cleaning care products achieved business income of 230 million Hong Kong dollars, an increase of 7 percent over the same period last year; and household cleaning care products achieved business income of 200 million Hong Kong dollars, an increase of 12 percent over the same period last year.
The reform of offline channels has achieved remarkable results, with the expansion of dealers and the orderly progress of store coverage. The company continues to deepen channel reform to cope with the rapidly changing purchasing habits of consumers, the Group strives to establish sound channels to reach consumers to the maximum extent, provide practical protection for sales growth, and continue to achieve 50% of online / offline income in the first half of the year. From a sub-channel point of view, in the first half of 22, the company's online channel revenue reached HK $1.5 billion, down 10% from the same period last year; the company's revenue from direct sales to major customers was HK $300 million, an increase of 91% over the same period last year; benefiting from the company's sales channel reform and offline distribution network optimization, the company's offline distributor channel achieved operating income of HK $1.1 billion, an increase of 99% over the same period last year.
The price of raw materials is high, and the domestic epidemic situation brings challenges to the operation of enterprises. The price of raw materials remained high in the first half of the year, but the company's gross profit margin remained stable at around 53% in the first half. In terms of expenses, the sales expense rate was 40%, a year-on-year increase of 8pcts, mainly due to the increase in sales staff and offline channel marketing expenses; the management expense rate also dropped to 17%, mainly caused by the increase in the cost of new administrative building leases and administrative staff in Guangzhou. On the whole, the expansion of the net loss of homing in the first half of the year is mainly caused by the exchange loss.
Profit forecast and investment advice: we expect the company to achieve a homing net profit of HK $1.221,483 million in 22-24, a year-on-year change of-19%, 48%, 21%, August 26, and PE is 41X/27X for 22 / 23, maintaining the "highly recommended" investment rating.
Risk hints: epidemic risk, raw material price fluctuation risk, channel reform less than expected risk, exchange rate fluctuation risk.