This report is read as follows:
The company announced the third quarterly report of 2022, the gross profit margin remained stable, the governance mechanism was further straightened out, and the "overweight" rating was maintained.
Main points of investment:
Maintain the "overweight" rating. In 2022, the company's Q3 realized revenue of 5.281 billion, a drop of 13.93%, and a net profit of 323 million, in line with market expectations. Considering the influence of epidemic and other factors, we reduced the EPS in 22-24 years to 0.83 yuan (- 0.03,0.99 yuan) and 1.15 yuan (- 0.01,1.15 yuan), and maintained the target price of 12.00 yuan.
Domestic retail real estate pressure continued, overseas Q3 contribution has declined. We estimate that the revenue from the company's Q3 main flooring business is down 27%, reflecting the weak demand brought about by the downward trend of real estate and repeated outbreaks in various places this year. At the same time, the higher-than-expected contribution of Q3 to the export business has narrowed. The compound growth rate of the B-end business of the company in the past 3 years is 30-40%, which is the core of driving the company's income growth, but with the frequent occurrence of 2021H2 real estate risk events, the company takes the initiative to adjust its business strategy. We believe that in the future, under the background of the leading state-owned enterprises and central enterprises, the company may gradually win by virtue of brand strength.
Gross profit margin remained basically stable. The company's Q3 gross profit margin is 24.17%, which is basically stable compared with the same period last year, or indicates that the cost pressure impact caused by raw materials over the past 22 years has been basically digested. At the same time, the proportion of Q3 in the income of bamboo and stone flooring with low gross margin has decreased significantly, which has also brought some structural gross profit improvement.
Continue to pay attention to straighten out the governance mechanism and improve the efficiency of management. We believe that Mr. Chen Jianjun succeeds as chairman of the company and has firm control of the company. At the end of December 21, Mr. Wu Guhua returned as president and secretary, or officially announced the beginning of a new era for a new generation of senior management team. Under the background of income pressure and thunderstorm of real estate enterprises in 2022, shrinking expenses, maintaining good cash flow and stable profitability have reflected the efforts made by the new management of the company in terms of internal control.
Risk hint: the risk of sharp decline in real estate investment and rising cost of raw materials
