Event: the company released its 2022Q1-Q3 report for the third quarter of 2022, with revenue of 1.328 billion yuan, year-on-year + 11.28%, net profit of 66 million yuan, year-on-year-8.84%, deduction of non-net profit of 74 million yuan, + 16.21%. Among them, 22Q3 achieved revenue of 225 million yuan, year-on-year-19.87%, home net profit of-9 million yuan, year-on-year-204.08%, deducting non-net profit of 105600 yuan, + 102.54%.
High base effect + customer inventory removal, Q3 off-season revenue is under pressure Q3 company's revenue is-19.87%, year-on-year revenue is under pressure, but the growth slope is improved month-on-month, mainly due to the following two aspects: on the one hand, 21Q3's revenue is + 187.41% year-on-year, and the high base effect caused by high growth in the same period is still there. If we look at the average compound growth rate of two years, the company's revenue in the third quarter still maintains a relatively high growth rate of + 51.52%. On the other hand, the company's main product lawn mower has a typical seasonal attribute, its shipping peak season is generally from the fourth quarter to the first quarter of the following year, and the third quarter is the traditional off-season. Under the current inflation background in Europe and the United States, overseas demand has fallen somewhat. Overseas retailers in the basic recovery of the supply chain, take the initiative to take inventory strategy, resulting in inventory demand and enthusiasm are significantly weaker than the same period last year. Although the company has achieved a certain incremental pull through the delivery of new products of riding lawnmowers, because it is still in the production capacity climbing stage, it is not enough to completely hedge the impact of the decline in orders for traditional lawn mowers.
The pressure on raw materials and sea freight has been alleviated, and the cost side has been actively invested.
Q3 company's gross profit margin is 14.23%, compared with + 0.28% and + 1.03pct respectively, the improvement is more obvious compared with the same period, mainly because: on the one hand, shipments of riding lawnmowers climb month by month, driving the company's overall gross profit margin to rise, on the other hand, the pressure on raw materials and sea freight is also alleviating. In terms of expense rate, Q3 company's sales, management, R & D and financial expense rates are 8.75%, 7.63%, 6.83% and-10.03%, respectively, compared with the same period last year. + 3.26,2.77, + 1.96,-10.62pct, and the overall expense rate is-2.63pct. Among them, the increase in sales expenses is mainly due to the higher advertising expenses incurred by the company in promoting its own brand and the increase in the salary of sales staff paid; the increase in management expenses is mainly due to the transfer of canteens and dormitories to fixed assets, depreciation and amortization of shares in the initial public offering project. The decrease in financial expenses is mainly due to the substantial increase in exchange gains caused by the rise in the exchange rate of the US dollar against the RMB. Superimposed investment income due to the increase in foreign exchange options investment losses, assets and credit reduction losses and other factors, the company Q3 home net interest rate of-4.03%, year-on-year-7.13pct.
Production capacity construction is intensive, and capacity bottlenecks continue to break through.
Based on the advantages of product and technology research and development, the company continues to open up core customers. According to the company announcement, 22H1 Depot, the largest home improvement retailer in North America, has become the company's largest customer. In order to meet the increasing order demand of The Home Depot Inc customers, the company continues to speed up new fund-raising projects and overseas subsidiary capacity construction, capacity bottlenecks continue to open. It is expected that in the future, with the improvement of The Home Depot Inc's channel income scale and share, the company's growth will continue to show.
Investment suggestion
In the medium to long term, we are optimistic about the growth logic of the company's core customer-driven growth and capacity expansion matching order growth, but in the short term, on the one hand, capacity construction and climbing will take time, on the other hand, the decline in demand will have a greater impact on the inflation background. so we downgrade the company's profit forecast. It is estimated that the return net profit of the company in 22-24 is 0.7,0.90 and 140 million yuan respectively (the previous value is 1.4,2.1 and 330 million yuan), with a growth rate of 33.9%, 16.7% and 55.5% respectively, and the current stock price corresponds to 37.0x, 31.7x and 20.4x of PE in 22-24 years. 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.