Event: the company releases semi-annual report 2022
The company's 22H1 realized revenue of 1.103 billion yuan, + 20.88% year-on-year, and net profit of 75 million yuan, + 18.04% compared with the same period last year. Among them, 22Q2 achieved revenue of 303 million yuan in a single quarter,-17.93% of the same period last year, and realized a net profit of 14 million yuan,-37.92% of the same period last year.
Q2 revenue growth slows month-on-month, profits are under pressure
The downstream demand for the superimposed company's production capacity was gradually released, and the company maintained steady growth in the first half of the year, achieving revenue of 1.103 billion yuan, + 20.88% compared with the same period last year. Among them, 22Q2 realized revenue / return net profit of 303 million yuan, respectively, compared with the same period last year. 37.92%, the growth rate is slower than Q1 (revenue + 47.12%, home net profit + 49.92%). It is expected to be mainly due to the slowdown in orders downstream of Q2. From a product point of view, 22H1's lawn mower, lawn mower / irrigation mower, and other power machinery and accessories respectively achieved revenue of RMB 9.66, 0.14, 0.62, 0.59 million, respectively, compared with the same period last year, which was + 31.10%, 45.26%, 2.60%, 32.96%, respectively. The main business of lawn mower maintained rapid growth, mainly due to the increase in shipments of Home Depot, the largest home improvement channel in North America. According to the company announcement, as of 22Q1 focus Home Depot has jumped from the company's fourth largest customer at the end of 21 to the largest customer. In terms of profitability, 22H1's gross profit margin / net profit margin is 16.50% / 6.79% respectively, year-on-year-2.40/-0.16pct. Among them, 22Q2's single-quarter gross profit margin / net profit rate is 13.20% / 4.72% respectively, year-on-year-5.84/-1.52pct. Under the background that raw materials and sea freight are still high, the company's profitability is under pressure in the first half of the year. The sales / management / R & D / financial expense rates of 22H1 are 3.50%, 5.83%, 2.61%, 1.13%, respectively, compared with the same period last year. Among them, the increase in sales expenses is mainly due to the company's increase in the promotion of its own brand, and the increase in management expenses is mainly due to the increase in equity payment amortization and staff compensation. The decrease in financial expenses was mainly due to an increase in exchange gains. Taking into account the loosening of raw materials and sea freight in the second half of the year, the company's profitability may rise steadily, adding to the economies of scale and foreign exchange benefits brought about by the climbing of the company's production capacity.
The intentional contract is full, and the fund-raising and convertible bond projects open the capacity bottleneck. The company's fund-raising project, the production project of 900000 new garden machinery products, began to climb at the end of 2021 and is expected to reach normal production by the end of 2022. at that time, the company's capacity bottleneck in step-by-step and intelligent products with relatively high value will be greatly alleviated. In addition, the company announced on August 1 that it intends to raise no more than 499 million yuan again to build the "annual production project of 60,000 riding lawnmowers" and the "annual production project of 220000 new energy garden machinery products". According to the announcement on August 4, it plans to invest 10 million US dollars to set up a wholly-owned subsidiary in Mexico to carry out the manufacturing business of garden machinery products, and the superposition company has been put into production at its manufacturing bases in North America and Thailand one after another. We believe that the company's capital expenditure at the capacity end is appropriately arranged in advance, which is expected to lay the foundation for growth and expansion in the next few years. On the demand side, the company's intention contract is full. According to the convertible bond report, as of July 28, the company has received purchase intentions from a number of customers, including more than 50,000 riding lawnmowers, more than 200000 lithium mowers and more than 500000 handheld lithium battery products. At the same time, the company has obtained orders for new energy garden machinery products and riding lawn mowers worth about 101.2862 million yuan and 25.3645 million yuan. Among them, it is worth mentioning that the company's riding lawn mowers were finalized in June and shipped and sold 1512 units in July. The gross profit margin of the products reached 22.03%, which is higher than the overall gross profit margin of the company's lawn mowers. It is expected that the company will improve its profitability after reaching full production. We believe that the company's downstream customer demand is improving, better match the pace of the company's capacity release, and the follow-up growth can be expected.
Investment suggestion
From 2022 to 2024, the company is expected to achieve operating income of 21.1,26.2 and 3.31 billion yuan respectively, an increase of 31.2%, 24.4% and 26.3% respectively, and a net profit of 1.4,2.1 and 330 million yuan, respectively, with a growth rate of 159.3%, 48.4% and 52.3% respectively, and the corresponding EPS is 0.90,1.34,2.03 yuan per share. The current stock price corresponds to 24.6x, 16.6x and 10.9x of PE for 22-24 years, respectively. Maintain the "overweight" rating.
Risk hint
The risk of intensified market competition; the risk of US economic recession on export demand caused by the Fed's interest rate increase; and the risk that the epidemic repeatedly affects the expansion of overseas markets.