Events:
According to the company's annual report, the operating income in 2020 was 1.584 billion yuan, an increase of 18.93 percent over the same period last year, and the net profit was 220 million yuan, an increase of 42.56 percent over the same period last year. It is proposed to pay a cash dividend of 3 yuan for every 10 shares.
Comments:
1. Direct marketing & bulk-driven Q4 growth accelerated, advance payment is still at a historically high level of Q4 single quarter, and the company's revenue and net profit increased by 44% and 75% respectively over the same period last year, which is significantly faster than the growth rate of 15% and 42% of Q3 revenue and profit respectively. According to the category, the revenue from cabinet and house customization business increased by 16% and 22% respectively in 2020; from the perspective of channels, the revenue from distribution, direct marketing and bulk sales increased by 5%, 36% and 62% respectively, and the proportion of distribution, direct marketing and bulk income was 62%, 13% and 25%, respectively. In terms of channel expansion, by the end of 2020, the company had 1248 stores (including 599s in the whole house and 649 kitchen cabinets) and 54 direct operations, a net increase of 78 and 17 respectively over the end of 1919. Following the four direct markets of Nanjing, Shanghai, Jinan and Wuxi, the company has further expanded the Hangzhou direct market and actively built the city benchmark with the direct operation mode in line with the brand positioning of middle and high-end whole-house customization. As a result of bulk business expansion, the balance of bills and accounts receivable increased by 61.5% to 480 million yuan at the end of 2020 compared with the same period last year, which was basically stable compared with the end of the third quarter. The balance of advance receipts and contract liabilities totaled 210 million yuan, which is still at a high level in history. to provide support for subsequent order reserves.
2. the net interest rate reached an all-time high in a single quarter, and the cash flow improved.
In 2020, the company's comprehensive gross profit margin decreased by 1.4pct to 42.4% compared with the same period last year, of which the cabinet gross profit margin decreased by 2.6 pct. We estimate that it is mainly due to the increase in the proportion of bulk business with low gross margin, and the house-wide custom gross profit margin is stable. From a sub-channel point of view, in 2020, the gross profit margin of direct operation and distribution decreased by 0.6pct and 1.6 pct respectively compared with the same period last year, while the bulk gross profit margin increased by 1.2pct to 26.6%. In the single quarter of Q4, the company's comprehensive gross profit margin was 43.7%, down 1.5 pct from the same period last year. The increase in scale prompted the Q4 sales and management + R & D expense rates to fall by 3.1pct and 1.7 pct respectively compared with the same period last year. The financial expense rate was stable, and the net profit rate rose to 16.65% from the same period last year, a record high. The cash flow situation improved. In 2020, the net operating cash flow increased by 154.5% compared with the same period last year, and the cash content of net profit was 1.
3. "three years Thousand Store" accelerated expansion, obvious valuation advantages, to maintain the "highly recommended-A" rating company as a leading company in the middle and high-end customized market segment, with "original design" to create differentiated product strategy, customer unit price leading the industry. After channel adjustment in recent years, 2021 officially launched the "three-year Thousand stores" plan to directly build a benchmarking market, distribution channels to speed up the expansion, the project channels continue to develop rapidly. It is estimated that the company's net profit from 2021 to 2022 will be 271 million yuan and 335 million yuan respectively, an increase of 23% and 24% respectively over the same period last year. The current stock price corresponds to 13x of PE in 2021. The valuation advantage is obvious, and the "highly recommended-A" rating is maintained.
Risk hint: competition in bulk and retail channels intensified, category channel expansion did not meet expectations.