Core ideas:
The income and profit of 2022Q1-3 company are under short-term pressure affected by the epidemic. 2022Q1-3 achieved a revenue of 1.67 billion yuan, an increase of 3.0% over the same period last year, and a net profit of 50 million yuan, a decrease of 39.6% over the same period last year, mainly due to the negative impact of the epidemic in many places, as well as the increase in advertising and consulting fees for the company's high-end transformation and upgrading. 2022Q3 achieved a revenue of 540 million yuan in a single quarter, a decrease of 7.7% over the same period last year, and a net profit of-5.41 million.
The main clothing business is under pressure, and the high-end upgrading of menswear brands drives the gross profit margin to continue to rise.
2022Q1-3 clothing business achieved revenue of 1.48 billion yuan, an increase of 5.1% over the same period last year. The main offline channels are under pressure due to the negative impact of the epidemic in many places. In terms of sub-channels, 2022Q1-3's offline channels achieved revenue of 1.12 billion yuan, an increase of 1.2% over the same period last year; online channels showed eye-catching performance, achieving revenue of 360 million yuan, an increase of 19.6% over the same period last year. In addition, the company menswear brand high-end upgrading results initially show, 2022Q1-3 company overall gross profit margin year-on-year increase 2.5pct, in which red bean men's wear business gross profit margin rose 5.1pct year-on-year; sub-channel point of view, online and direct channel performance eye-catching, online / offline channel gross profit margin year-on-year increase 8.3/0.3pct, direct / join joint venture stores gross profit margin year-on-year change + 16.9/-0.5pct.
The distribution of new energy by subsidiaries is expected to contribute to new profit growth. In August 2022, Hongri Wind Energy and Chaoyi Power invested to set up the project Hongchao Energy, which intends to participate in the construction of 3GW solid-state lithium battery production line and undertake the EPC project of 2GW wind power project; in October, Hongchao Energy Project achieved the annual output of 3GW high-power solid-state lithium battery intelligent manufacturing (phase I) project in line with industrial policy and market access standards, and was approved for filing. On November 10, Hongri Wind Energy acquired 100% equity interest in Xingzhou Construction of Liaoning Province through transfer. Xingzhou Construction has the second-class qualification of general contracting for electric power project construction, so the company has the relevant construction qualification of 2GW wind power project.
Profit forecast and investment advice. From 22 to 24, it is estimated that the EPS is 0.04, 0.06, 0.06 and 0.08 yuan per share respectively. With reference to the DCF valuation, the reasonable value of the company is 5.33 yuan per share, maintaining the "overweight" rating.
Risk hint. The price of raw materials is rising, the terminal demand is low, and the upgrading of the supply chain is not as high as expected.
