Incident Overview
In the first three quarters of 2022, the company's revenue/net profit attributable to the parent was 7.48/0.11/-023 million yuan respectively, up 13.69%/-61.72%/-458.89%. The Q3 company's quarterly revenue/net profit/net profit after deducting non-net profit from the Q3 company was 284/-0.10/-013 billion yuan respectively, up 13.89%/-162.59%/-450.12%. The performance fell short of expectations mainly due to the removal of inventory from the main outdoor business, increased investment in brand promotion, and the commissioning of the superimposed chip business slowed slightly.
Analytical judgment:
The main business went out of inventory, and the launch of the chip business was delayed. Q3 In the context of the epidemic, the company's revenue grew close to 14% in a single quarter and recovered to the basic 96% level in 19Q3 before the epidemic, maintaining a certain degree of resilience. We analyzed that on the one hand, camping supplies maintained high growth, and on the other hand, maintained a healthy turnover due to active inventory clean-up by the main outdoor footwear and clothing business, but Q3 chips did not contribute much due to the slight delay in production.
The year-on-year decline in gross profit margin and net interest rate was mainly due to the removal of inventory of outdoor footwear and clothing. (1) 22Q3 The company's gross margins and net interest rates were 41.10%/-3.39%, down 6.28/9.57PCT from the previous year. Mainly due to inventory removal and lowering the overall gross profit margin, the decline in net interest was higher than gross margin mainly due to rising management expenses, other income, and a decrease in net investment income; Q3 sales/management/R&D/finance expense ratios were 31.22%/11.58%/5.27%/-0.62%, the year-on-year increase of -1.78/3.46/0.69/-0.17PCT. The increase in management expenses was mainly due to the increase in management expenses, other income, reduction in net income from investment, etc. From the chip business. Other income/revenue was 0.38%, down 2.02 PCT year over year, and net income from investment was 0.75%, down 1.38 PCT year over year.
Accounts receivable are growing, and inventory turnover is healthy. The amount of accounts receivable/inventory/accounts payable in 22Q3 was $569/4.10/257 million, respectively, an increase of 55.71%/-10.94%/24.25%. The number of accounts receivable/inventory/accounts payable turnover days was 190.10/215.02/136.17 days respectively, an increase of 41.04/-74.62/-5.91 days over the previous year.
Investment advice
We analyzed that (1) in the short term, the company's inventory removal had a certain impact on profit margins, but the company maintained a healthy inventory turnover during the downturn in consumption. After the company hired a new spokesperson, Liu Haoran, the new pace of products accelerated, focusing on online growth on Double Eleven; (2) In the medium to long term, the company covers the outdoor goods+chip business. The chip business has already been applied to high-end medical displays, and is expected to lead new growth in the future. Considering the impact of Q3 inventory removal on profit margins, revenue for 22/23/24 was reduced by 15.4/20.51/2,617 billion yuan to 1,395/17.84/2,287 billion yuan, and net profit of 22/23/24 was reduced by 0.74/174/257 billion yuan to 0.60/1.21/210 million yuan, corresponding to a reduction of 22/23/24 EPS of 0.08/0.20/0.29 yuan to 0.07/0.14/0.24 yuan, October 26, 2022 The daily closing price of 7.17 yuan corresponds to PE 105/52/30X respectively, maintaining the “increase in holdings” rating. As of September 30, the company had repurchased 2,7052 million shares at a price of 7.13-7.84 yuan/share, amounting to 20 million yuan.
Risk warning
Uncertainty about the development of the epidemic, uncertainty about the performance of acquisition targets, sustainability of camping, systemic risks.