Forecast profit growth of 520% over the same period last year 620%
The company issued an annual performance forecast for 2022, which is expected to achieve a net profit of 405-470 million yuan in 2022, a year-on-year increase of 520%-265 million yuan, and a year-on-year increase of 470%-265 million yuan. The performance is basically in line with market expectations. The substantial increase in net profit is mainly due to a total impairment loss of 437 million yuan in 2021, resulting in a small net profit base. At the same time, the transfer of equity in Qianchuan, Hubei Province, confirms 174 million yuan after tax. If the profit and loss effects of consolidation and buyback items in the first half of Hubei Qianchuan are excluded, the company's net profit in 2022 will increase by 0% 15% compared with the same period last year. Deducting the non-homed net profit increased by 5% and 25% over the same period last year.
Pay attention to the main points
1. Continue to focus on the core strategy of "New original State + everyone's residence", and 4Q22's net profit will turn from loss to profit compared with the same period last year. According to the median estimate of the performance forecast, the company achieved a net profit of 438 million yuan in 2022, an increase of 570% over the same period last year, deducting 243 million yuan in non-return net profit, an increase of 525% over the same period last year. 4Q22 achieved a net profit of 57 million yuan, turned losses to profits, deducted 46 million yuan in non-return net profits, and turned losses into profits over the same period last year. The company continues to focus on the core strategy of "new status + everyone's residence", and the quality of operation is gradually restored.
2. Focus on the main retail road, and the everyone's housing strategy will continue to advance. On the channel, the company continues to encrypt the existing outlets, and sink to the third, fourth and fifth-tier cities, and continue to expand the traditional dealer channels. At the same time, the company actively arranges new channels such as bag-carrying, home improvement, complete decoration and new retail, which we expect to become a new driving force for performance growth in the future. In terms of product categories, the company continues to expand new categories and launched the high-end customized system door and window brand Deisha in October 2022 to further expand the company's product line, promote the residential business and provide a full range of solutions.
3. Offline household consumption continues to pick up, and household sales are expected to resume good growth in 2023. According to data from KE Holdings Inc. Research Institute, the leading indicators of the second-hand housing market rebounded in the first ten days of January, among which the volume and transaction volume rebounded obviously. in the first ten days of January, the average daily volume of second-hand housing in 50 cities increased by 22% compared with December 2022. Offline consumption is gradually recovering, and we expect household consumption to pick up significantly after the new year. At the same time, under the influence of a low base in 2022, the performance of high-quality enterprises is expected to usher in rapid growth.
Profit forecast and valuation
We keep the profit forecast for 2022 / 2023 unchanged, and introduce the 2024 homing net profit forecast of 396 million yuan. The current stock price corresponds to the price-to-earnings ratio of 11 times / 10 times earnings in 2023, respectively, and maintains an outperforming industry rating. Considering that the company's valuation is in the bottom range, the upward boom in the industry brings valuation repair, raising the target price by 17% to 14 yuan, corresponding to the 12 times / 11 times earnings ratio in 2023. There is 9% upside space.
Risk.
The property boom is declining more than expected, competition aggravates risks and raw materials fluctuate sharply.