The company's performance was lower than we expected.
The company announced its 2020 and 1Q21 results: 2020 operating income of 2.89 billion yuan, year-on-year-18.3%, net profit of 100 million yuan, year-on-year-20.3%, deducting non-return net profit loss of 180 million yuan. Corresponding to 4Q20 income of 960 million yuan, year-on-year-6.5%; return to the mother of the net profit loss of 46.8 million yuan. The cash dividend is 0.075 yuan per share, with a dividend rate of 24.9%. The operating income of 1Q21 is 810 million yuan, which is + 74.0% compared with the same period last year, which is 5.4% lower than that of 1Q19; the net profit of returning to the mother is 16.7 million yuan, which is 65.4% lower than that of 1Q20 and 65.4% lower than that of 1Q19; the net profit after deducting non-return is 120 million yuan, which is 68.5% lower than that of 1Q20 and 68.5% compared with 1Q19.
The company's performance is lower than we expected, mainly due to rising raw material prices and RMB appreciation in the context of difficult to resist rising cost pressure.
It is difficult to resist the pressure of rising costs, the company's profitability has declined sharply: 1) if the accounting standards change, the 2020 company gross profit margin year-on-year-5.1ppt, corresponding to 4Q20 gross profit margin year-on-year-6.8ppt. It is mainly affected by the rise in the price of raw materials and the appreciation of RMB exchange rate.
1Q21's gross margin is still under pressure. 2) under the pressure of the sharp rise in the price of raw materials, the company's products failed to raise prices successfully. In 2020, the company's average sales price of cooking utensils was 65.3 yuan,-2.9% compared with the same period last year, and the average sales price of small household appliances was 143.3 yuan,-9.1% compared with the same period last year. 3) the cumulative appreciation of RMB for the whole year of 2020 is 7%, which is 4.0% RMB 4Q20% higher than that of the previous year, resulting in an increase of 43.42 million yuan in the company's financial expenses compared with the same period last year. The company avoids exchange rate risk through hedging. In 2020, the relevant fair value change income + investment income is 33.47 million yuan, an increase of 33.82 million yuan over the same period last year. 1Q21, the appreciation of RMB slows down, and the related influence weakens.
Revenue recovery is not as expected: 1) 1Q/2Q/3Q/4Q20 's revenue year-on-year-45.6% Maqure 13.5% Universe 9.8% Universe 6.5%, the decline has narrowed but the recovery has been slow; 1Q21 revenue has not yet returned to the 1Q19 level. 2) according to Amoy data monitoring, the online retail sales of Aixida in 2020 were + 21% compared with the same period last year, while those of Subor cookware and Jiuyang cookware were + 31% and + 171%, respectively. 1Q21, Estelle's low-base offline retail sales are + 2.1% compared with the same period last year, but the growth rate still lags behind + 21% of Supor cookware, and the online sales scale of 1Q21 Supor cookware is 6.7 times that of Estelle.
Trend of development
1) the robot companies Jiang Chen Intelligence and Suo Luxin, which the company invested abroad, have not fulfilled their performance commitments. In 2020, the company deducted 21.3 million yuan from the goodwill impairment formed by the acquisition of Qianjiang robot, and the effect of cross-border development was mediocre. 2) the company's profit in 2020 mainly comes from the one-time government land acquisition and storage income of 270 million yuan, excluding this impact, the company's net loss in 2020. 3) the adjustment of the company's sales channel lags behind its competitors. In the second half of 2020, the company paid more attention to the e-commerce channel and set up a new marketing department, but the effect of online operation still needs to be improved and failed to grasp the 2020 online dividend.
Profit forecast and valuation
Due to the high cost pressure, we cut the net profit of 2021 by 24.4% / 19.3% to 97.7 million yuan / 113.52 million yuan in 2022. The current share price corresponds to a price-to-earnings ratio of 28.5 times 2022 / 24.5 times earnings. Maintain a neutral rating and a target price of 7.37 yuan, corresponding to 26.4 times 2021 price-to-earnings ratio and 22.7 times 2022 price-to-earnings ratio, which is 7.2% lower than the current stock price.
Risk.
The risk of market demand fluctuation; the risk of raw material price fluctuation.