Core ideas:
The company released its annual report for the year 22. 22H1 realized income of 990 million yuan,-3% year-on-year, and net profit of-13 million yuan,-116% year-on-year. The single-quarter income of 22Q1/Q2 is RMB 3.54 billion, which is + 5%, compared with the same period last year. The net profit of the parent company is-0.07 million, and 112% compared with the same period last year.
Category revenue decline, the expansion of the house-wide smart category. The revenue of 22H1 steel doors / other doors / smart locks is 7.3 million yuan, which is estimated to be-3%, 7% and 3% compared with the same period last year. The epidemic in East China has had an impact on the issuance of orders, delivery, transportation and installation of products (sales in the East accounted for more than 40%), and category revenue declined.
22H1 adds the intelligent lock of the love brand and the smart home of the whole house, actively promoting the construction of the whole home.
Optimize the dealer network and optimize the engineering end customers. The revenue of 22H1 dealer / engineering / e-commerce channel is 5.0 billion yuan, accounting for 52% of the main revenue, 46% and 2%, and the structure remains stable. On the one hand, the dealer network has been continuously optimized, with 22H1 adding 176new dealers and replacing and banning 12; on the other hand, the engineering side focuses on state-owned enterprises, central enterprises and high-quality private enterprises, focusing on participating in regional urban investment real estate and resettlement housing shantytown renovation projects, and is expected to start volume from collecting customer orders Q3.
At the time of the greatest cost pressure, Q3 has greater profit flexibility. On the cost side, the price of cold-rolled plate 21Q1-22Q1 remains high. Although the price of cold-rolled plate has been reduced since 22Q2 (22Q2/M7-8 compared with the same period last year), because of its lagging impact on cost and the increase in depreciation expenses after the consolidation of Changtian and Sichuan plants, the cost of 22H1 is still high, with a gross profit margin of 21.6%, year-on-year-6.8pct. On the fee side, the expense rate during the 22H1 period is 19.8%, year-on-year + 3.2pct, mainly due to sales expenses + 24% year-on-year (of which Guangxuan expense is + 256% year-on-year). We expect that the price reduction of raw materials from Q3 will gradually appear at the end of the report, while the climbing volume of the new factory will lead to a reduction in costs and expenses.
Profit forecast and investment advice. We estimate that the company's EPS for 22-24 years will be 0.20,0.63,0.92,48.7,15.4,10.5 times the corresponding PE according to the latest closing price, and give the company 18 times PE for 23 years, corresponding to a reasonable value of 11.40 yuan per share, maintaining a "buy" rating.
Risk hint. The recovery of real estate demand is not as expected, the fluctuation of raw material prices is higher than expected, and the company's production capacity is not as expected.