Be optimistic about the long-term development of the company and maintain its "buy" rating
With the increase of penetration and category expansion, the growth logic of the company continues to verify. Considering that the company's performance continues to exceed expectations, we raise the company's homing net profit forecast for 2022-2024 to 11.25,19.28 and 3.259 billion yuan (the original forecast is 10.49,17.88,2.994 billion yuan), and the EPS is 2.26,3.87,6.53 yuan per share. The current stock price corresponds to 42.5,24.8,14.7 times of PE in 2022-2024, maintaining the "buy" rating.
The performance is in line with expectations, and the trading volume of Duoduo platform continues to grow at a high level.
The company issued a performance forecast that the operating income in 2022 is expected to be 726.5 to 73.4 billion yuan, an increase of 95.14 percent to 97.15 percent over the same period last year; the estimated net profit of returning home is 11.2 to 1.135 billion yuan, an increase of 93.63 percent to 96.23 percent over the same period last year; and the net profit of deducting non-returning mothers is expected to be 10.38 to 1.053 billion yuan, an increase of 95.40 percent 98.23 percent over the same period last year. Among them, Q4 is expected to have an operating income of 263.64-27.114 billion yuan in a single quarter, an increase of 91.7% over the same period last year. The estimated net profit of returning home is 437-452 million yuan, an increase of 88.3% over the same period last year. The net profit of deducting non-return is expected to be 417-432 million yuan, an increase of 85.3% 92.0% over the same period last year, which is in line with expectations. The rapid growth of performance is mainly due to the rapid growth of platform trading volume, which promotes the rapid growth of revenue and gross profit.
On November 28, 2022, the company issued an announcement to increase its holdings, Liu Quan and Qian Xiaojun, the company's controlling shareholder and actual controller, as well as Tian Tao, director and chief financial officer, Pan Yong, director and secretary to the board of directors, Liu Junzhai, CEO, Wang Ting, co-founder, Liu Yuan, director and deputy general manager, and Liu Rui, chairman of the board of supervisors. Technical director Zhang Meifu, CEO Huang Shasha, CEO Yin Haifeng, CEO Ji Jingjing, co-founder Zhao Jinheng and manager Wei Hongxia plan to increase their holdings by 5020 to 100.4 million yuan. On December 20, the company issued a buyback announcement with a total repurchase capital of 200-400 million yuan (including), which is intended to be used in employee stock ownership plans or equity incentives. The active increase of senior executives' holdings and the company's large-scale buybacks demonstrate their confidence in future development.
Risk hints: market competition aggravates the risk; the expansion of new categories is less than expected risk; the risk of economic environment deterioration.