Incident: The 2022 annual report and the first quarterly report of '23 were released. Revenue in 2022 was 2,203 billion yuan, a decrease of 16.72% over the previous year; the net profit of the mother was 42,985,500 yuan. 23Q1 achieved revenue of 395 million yuan, an increase of 11.57% over the previous year, and Guimu's net profit was 15.41 million yuan, an increase of 325.66% over the previous year.
Comment:
Impairment measures affected 2022 results, and 23Q1 performed brilliantly. 22Q4 achieved revenue/net profit of 6.14/-54 million yuan in a single quarter, a year-on-year decrease of 26.72%/-403.32%. The reason for the poor net profit performance of the fourth quarter was that the company accrued a credit impairment loss of 123 million yuan, which led to a loss in net profit for Q4 '22 and the full year, and raised a total of 161 million yuan in bad debt reserves for the whole year. The gross margin for the full year of '22 reached 24.46%, comparable to that of '21, and the gross margin performance was relatively stable. The annual sales/management/R&D/finance expense ratio was 11.19%/4.72%/3.12%/-0.01%, respectively, with a year-on-year increase of 0.22pct/0.58pct/0.91pct/0.8pct. Affected by the decrease in revenue base, the cost rate increased rapidly.
Revenue from steel security doors/smart locks/other doors for the full year of '22 was 1,552 million yuan/151 million yuan/396 million yuan respectively, a year-on-year decrease of 16.16%/6.46%/26.3%. Affected by the decline in raw steel prices in the first quarter, gross margin increased 4.38 pct to 27.32% year on year, which led to a sharp increase in net profit of Guimu.
E-commerce sales bucked the trend in '22, and the engineering side focused on high-quality customers. E-commerce channels developed rapidly throughout the year 22. Looking at each channel, the company's big B/C end/e-commerce channel revenue was 923 million yuan/666 million yuan/458 million yuan/503 million yuan respectively, a year-on-year change of -21.91%/-11.52%/-20.91%/41.69%, accounting for 43.95%/31.71%/21.80%/2.54% respectively. The company adopted the strategy of using safety doors to drive wooden doors, smart locks and other products, renewed contracts with previous high-quality project customers, and won bids for collection projects in Poly, Jindi, China Construction International, and Longhu. The company's operating cash flow turned positive during the reporting period, and risk management and control achieved results.
Continue to invest in advertising and promote the business to expand the company's popularity. Business promotion expenses in '22 were 29.84 million yuan, an increase of 53.97% over the previous year. During this period, it achieved 1 billion plus annual exposure, including high-speed rail titles, high-speed rail station advertisements, cinema advertisements, and CCTV advertisements. The company's steel entrance doors and wooden doors won the top 500 comprehensive strength suppliers for Chinese real estate development enterprises in 2022.
Maintain the company's “increase holdings” rating and adjust profit forecasts based on annual reports. The company's net profit from 2023 to 2025 is expected to reach 209, 2.76, and 368 million yuan respectively, reversing losses and profits, increasing 32% and 33% over the previous year, corresponding to valuations 20, 15, and 11 times.
Risk warning: downstream demand falls short of expectations; valuation and profit forecasts fall short of expectations