Items:
The company issues the annual report for 2020 and the quarterly report for 2021. In 2020, the total operating income was 3.218 billion, an increase of 0.24% over the same period last year, and the net profit was 307 million yuan, down 6.58% from the same period last year. Realize basic earnings per share of 0.83 yuan. In the first quarter of 2021, the company achieved revenue of 709 million, an increase of 43.14% over the same period last year, and its net profit was 40 million yuan, an increase of 39.84% over the same period last year.
Comments:
The engineering business grew rapidly in 2020, and the export business dragged down the overall income growth. The company's domestic sales revenue in 2020 was 2.412 billion yuan, + 3.93% compared with the same period last year, of which retail channel income was 1.591 billion yuan, year-on-year + 0.27%, engineering channel revenue was 820 million yuan, year-on-year + 11.87%, and foreign sales revenue was 773 million yuan, year-on-year-10.01%.
In 2020, sanitary ceramics / bathtub shower room / wall and floor tiles / hardware sanitary ware / bathroom cabinets realized income of 16.74pm / 1.04pm, respectively. 2.24 million yuan, year-on-year-4.05%, 3.72%, 0.96%, 11.35%, 10.65%, respectively, compared with the same period last year, which is-4.05%, 3.72%, 0.96%, 11.35%, 10.65%, respectively.
Compared with 2019, the company's 2021Q1 revenue increased by 8.17% compared with 2019Q1, while its home net profit fell by 24.09%. We expect that as the global epidemic gradually recedes, the export growth rate is expected to pick up; the domestic market is expected to achieve restorative growth on the basis of the upgrading of retail channels & the expansion of engineering and home improvement channels.
Short-term earnings are under pressure and are expected to improve in the long run. In 2020, the company's overall gross profit margin was 31.33% (year-on-year-1.70pct) and net profit margin was 9.86% (year-on-year-0.93pct); 2021Q1's overall gross profit margin was 27.59% (down 1.72pct year-on-year 2020Q1 and 1.55pct lower than 2019Q1), and net profit margin was 6.00% (year-on-year 2020Q1 increased by 0.59pct, year-on-year 2019Q1 decreased by 2.5pct). We believe that the main reason for the decline in the company's gross profit margin is the change in the product structure; the second is the increase in the price of raw materials; the third is that the company implements the new revenue criteria and reclassifies "sales expenses-miscellaneous expenses" to operating costs; in terms of the rate of period expenses, the company's 2020 / 2021Q1 sales rate is 8.23% and 9.70%, respectively compared with the same period last year-1.20pct/-0.20pct. Due to the increase in salary and R & D investment, the rates of management and R & D expenses were 0.46pct, 10.98% and 13.86%, respectively, compared with the same period last year. Due to the decrease in exchange earnings, the financial expense rate reached 1.02% 0.69pct/+0.72pct and 0.07% respectively compared with the same period last year.
The channel is continuously optimized and the production capacity is steadily expanded. (1) at the channel end, the company has built a marketing network system in China, which is mainly based on offline distribution, supplemented by engineering channels, e-commerce, overall home decoration and Internet home decoration. As of December 31, 2020, the company has a total of 2243 stores in China. In terms of engineering channels, the company launched engineering dealers and officially launched the HUIDA new infrastructure industry alliance for sanitary ware, and the proportion of engineering channel revenue increased to 25.48% from 22.83% in the same period last year. In addition, the company continues to open up the international market and set up a marketing network covering many countries and regions. (2) on the production side, the fund-raising project with an annual production capacity of 2.8 million pieces of sanitary ceramics was completed on September 10, 2020; the sanitary ceramic production line with an annual production capacity of 800000 pieces of intelligent bathroom products in the first phase of the Chongqing project has been put into trial production in 2020. lay the foundation for long-term development.
Channel and capacity optimization continues to maintain a "strong push" rating. We continue to be optimistic about the company's domestic channel construction and capacity expansion, and the export side is actively engaged in international market development. Taking into account the impact of the "COVID-19" epidemic on the company's export business, we adjust the company's profit forecast and estimate that the net profit from 2021 to 2023 will be 3.78,4.38 and 496 million yuan respectively (the original forecast 2021 shock 463 million yuan respectively in 2022), EPS is 1.01pm 1.15pm 1.31 yuan per share, corresponding to the current market capitalization PE is 11-10-9 times respectively. In view of the rapid recovery of the project channel, maintain the company's target price of 20 yuan per share, and maintain a "strong push" rating corresponding to 20 times PE, in 21 years.
Risk hint: the real estate market is not as expected, and exchange rate fluctuations lead to sharp fluctuations in profits.