1H22 performance is lower than market expectations.
The company announced its results for the first half of 2022: 1H22 realized income of 964 million yuan, down 45.58% from the same period last year, with a net profit loss of 385 million yuan, a loss of 128 million yuan in the same period last year, deducting a net profit loss of 385 million yuan in the same period last year, and a loss of 128 million yuan in the same period last year, which was lower than market expectations, mainly due to the epidemic affecting the company's offline sales and rising prices of raw materials. From a quarterly point of view, the company's 1Q/2Q22 realized income of RMB 375 million, respectively, compared with a year-on-year loss of RMB 244 million, compared with a loss of RMB 220 million in the same period last year, and a loss of RMB 141 million in 2Q22's net profit in the same period last year.
Trend of development
The main results are as follows: 1. The impact of the epidemic is significant, and all businesses have declined significantly. From the perspective of different industries, 1) Home improvement: 1H22 realized income of 824 million yuan, with a decrease of 47.33%, gross profit margin decreased from 4.72ppt to 22.21%; 2) Seiko clothing: 1H22 realized income of 30 million yuan, with a decrease of 40.78%; 3) Public wear: 1H22 realized income of 63 million yuan, with a decrease of 39.32%. 1H22 due to the impact of the epidemic in various places, the company's logistics, business signing and order turnover in many places, such as South China and Beijing, have been blocked, resulting in a decline in revenue.
2, profitability decline, pay attention to the follow-up repair situation. The company's 1H22 gross profit margin is 25.96%, year-on-year-2.9ppt, mainly due to the rise in the price of raw materials. From the expense side, the company's expense rate during the 1H22 period is 80.11%, year-on-year + 44.4ppt, in which the sales / management + R & D / financial expense rate is 51.91%, 26.74% and 1.46%, respectively, and + 31.3ppt/+12.3ppt/+0.9ppt. Under the comprehensive influence, the net interest rate of 1H22 is-39.91%, year-on-year-32.7ppt.
3. Digital strategy to improve quality and efficiency, product upgrading and brand building are promoted steadily. 1) Digital upgrade:
The company's digital strategy accelerates the landing, realizes the successful docking of the real home design software and the DIM+ system, improves the design efficiency and the degree of personalization of the scheme, and uses Xingyao SAAS system to realize the whole process digital delivery. The overall on-time delivery rate of the digital loading business is more than 95%, and the customer satisfaction is more than 9.6 points. 2) Product R & D: the company has made great efforts to strengthen product innovation, independently designed more than 200 cases of digital lifestyle, Xingyao sales APP has been significantly optimized, and the customer acquisition capacity has been continuously enhanced; at the same time, it has promoted the in-depth expansion of supply chain channels, with a total of 18 products in vertical supply chain with a total of 5233 SKU, regional supply chain online with 10053 SKU, and continuous improvement of supporting products richness. 3) Brand building:
The company was successfully selected by Xinhua News Agency National Brand Engineering Industry in February 2022, and the brand image of Xinguochao Home Decoration has been continuously improved. We expect that the brand influence will continue to improve in the future.
Profit forecast and valuation
Considering that the epidemic affected the company's business in the first half of the year, we lowered the 2022 homing net profit forecast by 65% to 46 million yuan, and maintained the 2023 homing net profit forecast of 157 million yuan. the current stock price corresponds to a price-to-earnings ratio of 17 times earnings in 2023 and outperforms the industry rating and the target price of 7 yuan. corresponding to the price-to-earnings ratio of 19 times earnings in 2023, there is 13% upward space compared with the current stock price.
Risk.
The impact of the epidemic in some areas, the price of raw materials rose, real estate regulation and control exceeded expectations.