Core viewpoints

Shuaifeng Electric Appliance's short-term performance decline in 2022, 2022Q4 and 2023Q1 profitability continued to improve, high-end products accounted for a high proportion, fund-raising projects promote the high growth of cabinet business. The company will speed up the progress of omni-channel construction and increase the sales share of supporting products, and will increase the cost in 2023. At the same time, the performance evaluation target is higher, and it is expected to seize more market share, while adhering to the middle and high-end positioning, and the profit level remains stable.

Event

On April 20, 2023, Shuaifeng released the 2022 annual report; on April 28, 2023, Shuaifeng released the first quarter report of 2023.

In 2022, the company realized operating income of 946 million yuan (YOY-3.20%), net profit of 214 million yuan (YOY-13.08%) and net interest rate of 22.65% (YOY-2.58pct), of which Q4 realized operating income of 237 million yuan (YOY-18.50%), net profit of 62 million yuan (YOY-0.26%) and net interest rate of 26.33% (YOY+4.82pct).

2023Q1 realized operating income of 175 million yuan (YOY-8.52%), net profit of 40 million yuan (YOY+6.33%) and net interest rate of 22.87% (YOY+3.20pct).

Brief comment

First, income analysis: integrated stove subdivision category is outstanding, emerging channels increase Ⅰ, sub-products: steaming and baking independent leading advantage, cabinets and supporting products will be on the quantity 1) integrated cooker: online share increase, steaming and baking independent leading. Realized income of 859 million yuan (YOY-4.93%), accounting for 90.79%. In terms of sales, according to Oviyun data, 2022 integrated cooker online sales year-on-year-7.69%; Shuaifeng brand integrated cooker online sales-4.88% year-on-year, market share + 0.15pct. In terms of structure, according to Oviyun data, in 2022, the sales of steaming and baking on Shuaifeng integrated cooker line (integrated steaming and baking plus independent steaming and baking) accounted for 80% respectively, of which independent steaming accounted for 38%, leading the competitors.

2) other kitchen supplies: realized income of 41 million yuan (YOY-14.10%), accounting for 4.35%. In 2022, the company will expand the sales of kitchen appliances, and will steadily increase the matching rate and customer unit price in the future, and other kitchen supplies are expected to be sold.

3) Ambry: realized income of 29 million yuan (YOY+189.96%), accounting for 3.11%.

The company's fund-raising projects promote the sales growth of house-wide customization and cabinets, and will gradually improve the product matrix to provide one-stop integrated smart kitchen solutions.

4) other business: realized revenue of 17 million yuan (YOY+4.66%), accounting for 1.75%.

Ⅱ, sub-channels: dealer quality improvement, emerging channels rapid growth 1) Dealers: improve the quality of stores, build a benchmark dealer in the future. Realized income of 874 million yuan (YOY-1.97%), accounting for 92.39%. In 2022, the company added and optimized about 200 dealers, maintained nearly 1300 dealers and more than 1600 sales terminals, and added or renovated 220s of Shuaifeng's fifth-generation image stores, including more than 30 stores in first-and second-tier cities. The company actively promotes the "Resource allocation Plan of Benchmarking Club". In three years, the terminal retail sales of provincial capital cities have reached 100 million, prefecture-level cities have reached 5000 million, and county-level cities have reached more than 1000 million.

2) E-commerce: adjust the strategy and structure, and it is expected to pick up in the future. Realized income of 42 million yuan (YOY-36.29%), accounting for 4.43%. According to Aowei Yun.com, the online sales, sales and average price of Shuaifeng integrated cooker in 2022 were 375 million yuan, 33900 units and 11044 yuan per unit, respectively, which were-1.31%,-4.88% and + 3.75% respectively compared with the same period last year, and the average price was ahead of the main competitors. In 2022, the company adjusts its e-commerce channel marketing strategy to promote the transaction rate of dealers' offline stores. With the recovery of demand for integrated kitchen products, e-commerce ToC sales are expected to pick up.

3) offline direct selling and others: speed up the construction of all channels and increase the scale of income. The realized income is 30 million yuan (YOY+50.61%), accounting for 3.18%.

In 2022, the company mainly strengthened the development and construction of sinking channels and home improvement channels, actively cooperated with JD.com Wisdom Kitchen and Tmall excellent products, promoted the total cooperation of home decoration channels, and reached more than 1000 cooperation outlets with Hunan Qiansi and other local home improvement channels. increase product and cost investment, expand channel coverage, and help the growth of emerging channel income.

Second, profit analysis: improvement of cost side and improvement of profitability

I, gross margin: integrated kitchen gross profit margin is stable, Q4 gross profit margin rebounded significantly in 2022 gross profit margin of 46.09% (YOY-0.14pct), of which Q4 gross profit margin was 46.90% (YOY+1.65pct), mainly due to the cost dividend brought by the downward price of Q4 raw materials.

1) Sub-products: in 2022, the gross profit margin of integrated stoves is 48.03% (YOY+0.20pct); the gross profit margin of other kitchen supplies is 11.54% (YOY+2.76pct); and the gross profit margin of cabinets is 18.31% (YOY+8.90pct), which is mainly due to the increase of cabinet category and income growth, and the scale effect leads to the decrease of unit cost.

2) Sub-channels: 2022 dealer gross profit margin of 45.08% (YOY+0.62pct); e-commerce gross profit margin of 54.13% (YOY-6.49pct), mainly online product structure adjustment; offline direct sales and other gross profit margin of 64.23% (YOY-13.97pct), mainly due to more sales of supporting products, small batches, has not yet formed a scale effect, and the gross profit margin is reduced.

Ⅱ, expense side: Channel expansion + depreciation increase, annual expense rate increase during 2022, expense rate increased 3.15pct, sales / management / R & D / financial expense rate increased year-on-year, sales / management / R & D / financial expense rate increased 0.82pct, sales / management / R & D / financial expense rate increased year-on-year + 4.48/+0.92/-2.97/-1.62pct respectively. Main departments:

1) the company continues to increase the omni-channel layout; 2) salary expenditure and depreciation increase; 3) interest income increases significantly.

Ⅲ, net profit side: Q4 net interest rate rebounded, profitability is expected to continue to improve in 2022 to achieve a net profit of 214 million yuan (YOY-13.08%), net interest rate of 22.65% (YOY-2.58pct), of which Q4 realized a net profit of 62 million yuan (YOY-0.26%) and a net interest rate of 26.33% (YOY+4.82pct). The company's Q4 gross profit margin and net profit margin are higher than the same period last year, and the company's profitability is expected to continue to pick up as the demand for integrated cooking products picks up.

Third, 2023Q1: the profitability will improve, the cost will usher in the results, the terminal demand will pick up, and the profitability will rise steadily. 1) Revenue side: according to Oviyun data, the online sales and sales of 2023Q1 integrated cookers are-9.74% and-6.69% respectively compared with the same period last year, while the terminal demand is still under pressure. Shuaifeng brand integrated cooker online sales and sales are + 21.86% and + 21.43% respectively compared with the same period last year, resulting in a significant increase in market share. Company Q1 realized operating income of 175 million yuan (YOY-8.52%). 2) profit side: the Q1 gross profit margin of the company is 47.70% (YOY+3.37pct), which is mainly due to the improvement of raw material cost and the continuous optimization of superimposed product structure; the period expense rate decreases 1.66pct compared with the same period last year, and the sales / management / R & D / financial expense rate is respectively + 3.64/-1.13/-4.31/+0.14pct compared with the same period last year. Achieve a net profit of 40 million yuan (YOY+6.33%) and a net interest rate of 22.87% (YOY+3.20pct).

Investment suggestion: the strength of the company's middle and high-end integrated products is outstanding, the second generation succession optimizes the management organizational structure and diversified channel layout, and the assessment goal of the equity incentive plan is expected to continue to be effective. We predict that in 2023-2025, the company will achieve a net profit of 2.42 million yuan, 2.92 million, and 1.31 million, corresponding to 1.58, 1.90 EPS, and 8.86 times the current stock price, corresponding to 12.82, 10.61, and maintaining a "buy" rating.

Risk analysis.

1) Industry competition intensifies: traditional kitchen and bathroom brands such as boss, Fangtai and Huadi have successively entered the integrated cooker industry and stepped up the layout of offline channels and products, and the trend of price competition has emerged in subdivided products. with the continuous layout of the brand sinking market and high-end products, price competition may be further intensified.

2) Raw material prices rebounded: raw materials are the main composition and cost source of integrated cooker products, raw material prices affect the profitability and performance of integrated cooker plate, the current raw material prices are low, but the average gross profit margin of the industry is difficult to improve. With the reversal of raw material prices, the profitability of the integrated cooker industry may further decline.

3) fluctuations in the real estate industry: integrated stove sales are mainly concentrated in third-and fourth-tier cities, offline distribution channels, and mainly from new house decoration, the current residential sales growth rate is in a downward range, integrated stove sales may continue to be under pressure.