Overview of events

In 2022H, the company income / return net profit / non-return net profit decreased by 4.84%, 1165.12% and 1561.58%, respectively, of which 2022Q2's income / return net profit / non-return net profit decreased by 12.09%, 2428.47% and 2158.47% respectively, which was lower than expected.

The company announced on July 1 that it signed a "Camp Cooperation Agreement" with Beizhuang Tourism to cooperate in the SANFO HOOD light luxury camp project, which will help to speed up the layout of the company's camp and camping-related markets and bring new profit growth points.

Analysis and judgment:

The main business and squirrel park drag, online rapid growth. The revenue from outdoor supplies / outdoor services / masks in 2022H was 2.19 billion yuan, an increase of 5.49%, 47.59% and 94.87% respectively over the same period last year. The growth of outdoor goods business mainly contributed to the revenue growth of e-commerce: (1) the revenue of stores in 2022H was 116 million yuan, down 6.81% from the same period last year; as of the end of 2022H, there were 47 retail stores (including 7 flagship stores / standard stores / boutiques / brand stores / ski stores respectively) and one net store in 22 years, the number of stores increased by 15% compared with the same period last year, and the same store is estimated to decline by 19%. In terms of area, the total store area is about 26,000 square meters, up 8% from the same period last year, resulting in a 14% drop in flat efficiency compared with the same period last year. (2) online: the transaction volume of self-built platform and third-party sales platform was 138 million yuan, an increase of 41.4% over the same period last year. Online Sanfu outdoor Douyin store received a total of 8 million views, 170000 visitors, with a turnover of 8.5426 million yuan. Sanfu Outdoor Douyin store received a total of 350000 visitors in the first half of the year, with a transaction value of 6.0872 million yuan. The official flagship store of Sanfu opened in April 2022, with a turnover of 1.4 million yuan in three months. Online self-operated Tmall Klattermusen travel rat store grew by 1300% during the period of June 18; sales of German professional sports gloves brand Reusch increased by 40% compared with the same period last year; brands represented by professional outdoor backpack MYSTERY RANCH (mysterious farm), outdoor shoes and boots DANNER, LA SPORTIVA, Lizard, sports glasses Julbo, etc., developed steadily. (3) the sharp decline in outdoor services is mainly due to the rebound of the epidemic in East China, outdoor parent-child parks, sports events, team-building and other businesses have been affected by delays, park closures and current restrictions, resulting in a significant reduction in revenue. The company's park, team-building and event business income of 0.14pm, 0.00003 million yuan respectively, down 26%, 62% and 99% from the same period last year. 2022H company squirrel tribe received a total of 262900 visitors, down 30.60% from the same period last year.

Private brands are growing rapidly, and XBIONIC is growing at a high rate. In 2022H, the company's own brand revenue was 64 million yuan, increasing 11.53pct to 29.11%, an increase of 74.7% over the same period last year; of this total, clothing / footwear / equipment revenue was 0.58 billion yuan, up 79.85%, 60.60%, 1.78%, and 91.65%, 5.61%, 2.74%, respectively, and X-BIONIC product revenue was 52.26 million yuan, up 118%.

Gross profit margin improved significantly, losses mainly from outdoor services and X brand increased investment. In 2022H, the company's gross profit margin was 58.80%, an increase of 8.54PCT over the same period last year, of which Q2 gross profit margin was 53.94%, an increase of 1.04pct over the same period last year. The gross profit margin of outdoor clothing and equipment mainly increased significantly: in 2022H, the gross profit margin of outdoor clothing / outdoor shoes and socks / outdoor equipment was 65.84%, 58.84% and 55.08% respectively, an increase of 13/6.6/10.7PCT over the same period last year. The increase in gross profit margin of outdoor clothing, shoes and equipment is mainly due to the contribution brought by the growth of the company's own brand. The net interest rate in 2022H was-7.41%, a year-on-year decline in 8.61PCT, of which Q2 net interest rate was-18.5%. The loss mainly came from outdoor parent-child park, sports events, and team building business, because the epidemic could not normally carry out losses of up to 9.4883 million yuan, while superimposed X brand increased investment. In 2022H, the sales / management / R & D / financial expense rates were 37.80%, 17.23%, 2.29%, 2.48%, respectively, with a year-on-year increase of 8.78/6.04/0.25/-1.18PCT, of which the increase in management expenses was mainly due to the amortization of intangible assets of the X-BIONIC brand and the increase in employee compensation.

Asset impairment loss / income was 5.29%, year-on-year growth of 3.74PCT, mainly due to inventory decline loss and contract performance cost impairment loss increased. The income tax / income ratio was 2.25%, a year-on-year increase in 1.68PCT, mainly due to an increase in profits of some subsidiaries.

Inventory is high and turnover days have risen sharply. The inventory of 2022H company was 290 million yuan, an increase of 38.7% over the same period last year, a decrease of 17.55%. The inventory turnover days were 494days, an increase of 167days. The accounts receivable of the company was 38 million yuan, down 28.59% from the same period last year. The average turnover days of accounts receivable was 25.32 days, 7.32 days less than the same period last year.

Investment suggestion

According to our analysis, (1) the camping industry is hot, and the proportion of the company's equipment revenue has increased from 20% to more than 40%, maintaining a growth rate of more than 200%; the company's Sanfu hood camp operation business is also expected to gradually contribute to revenue; (2) X-BIONIC will be the focus of the company's core business and is expected to maintain rapid growth in the future. (3) the company acquires Guizhou Yingji and creates a comprehensive quality education IP construction of "Squirrel Tribe parent-Child Outdoor Park + Sanfu Little Warrior + Eagle extreme Safety Education Base". After the domestic epidemic situation has eased, the income of the Squirrel Paradise project is expected to grow rapidly. However, taking into account the impact of the epidemic and the increased investment of Brand X, the revenue forecast for 2022 was lowered from 677 million yuan to 608 million yuan, the revenue forecast for 23-24 was raised from 1.46 billion yuan to 952 million yuan, and the 22-year return net profit forecast was reduced from 30 million yuan to 20 million yuan. The forecast of return net profit for 23-24 is raised from 0.71 million yuan to 0.7 / 83 million yuan. Correspondingly, the 22-year EPS forecast was lowered from 0.19 yuan to 0.13 yuan, and the EPS in 23-24 was raised from 0.38 to 0.45 yuan to 0.44 and 0.53 yuan. On September 5, 2022, the closing price was 11.27 yuan, corresponding to the estimated value of the PE in 22-23-24, which was 8925max 21X, maintaining the "overweight" rating.

Risk hint

X-BIONIC operation is not as expected; Squirrel Park passenger flow recovery is not expected; offline store expansion is not as expected; systemic risk.