Event
Release the 2021 annual report: 2021 revenue of 5.157 billion yuan / + 9.7%, net profit of 291 million yuan /-0.6%, net profit of 159 million yuan /-34.1%, net cash flow of operating activities of 416 million yuan /-45.0% (basic) of 0.57 yuan /-3.4% (weighted) of 18.0%/-3.6pct. It is proposed to distribute a cash dividend of 1.08 yuan (including tax) to all shareholders for every 10 shares.
Release the quarterly report of 2022: 22Q1 revenue 1.373 billion yuan / + 30.5%, return net profit 62 million yuan / + 43.4%, deduct non-return net profit 70 million yuan / + 61.8% The net cash flow of operating activities is 95 million yuan / not applicable (in the first quarter of 2021, the company responded to a sharp rise in raw materials, an increase in strategic reserve inventory, and a large operating cash flow outflow, which did not exist in the same period in 2022). EPS (basic) is 0.11 yuan / + 22.2% 3.0%/-3.0pct (weighted).
Plan for public issuance of convertible bonds: the company intends to issue convertible bonds to raise no more than 850 million yuan to invest in the project of printing and dyeing production line of high-grade knitted fabrics with an annual output of 48000 tons (phase I), Vietnam 100, 000 yarn construction project, Shengzhou Shengtai 22MWp distributed photovoltaic power station construction project, information construction project and supplementary liquidity.
Brief comment
With the weakening impact of the overseas epidemic, the gradual release of the company's ability to put into production, and the slowdown in the growth of raw materials and freight, the company's 22Q1 revenue and performance were + 30.5% and 43.4% respectively compared with the same period last year. On the revenue side, the company's overseas orders are in good condition, transportation tends to be normal, and production expansion projects release capacity one after another, and capacity utilization has rebounded compared with the same period last year; on the profit side, the price increase of raw materials has slowed down and sales freight has been controlled, and the company and customers are conducting price adjustments. The company's single-quarter gross profit margin is 17.7%/-1.4pct, which is 1.8 pct higher than Q4; the period expense rate is 10.4%/-1.1pct, in which the sales, management, R & D and financial expense rates are 2.7%/-0.3pct, 4.5%/-0.4pct, 1.1%/-0.4pct, 2.1% Universe 0.1pct; and the homing net profit rate is 4.5%/+0.4pct.
Revenue in 2021 is in line with expectations, and profits will be affected by overseas outbreaks, rising prices of raw materials and sea freight. In 2021, the growth rate of the company's revenue and performance was 9.7% and-0.6%, and the net profit growth rate after deducting non-return was-34.1%. The sharp decline in the post-deduction performance was mainly due to the sharp increase in the price of raw materials, epidemic situation overseas, poor shipping and so on. The company ensures punctual delivery by air transportation and other means, generating additional freight of more than 80 million yuan. The gross profit margin of the company is 15.9%/-4.1pct, in which the gross profit margins of knitted garments, woven garments, knitted fabrics, woven fabrics and yarns are 16.4%/-6.5pct, 16.0%/-2.0pct, 10.8%/-8.6pct, 17.4%/-8.7pct and 13.7%/+6.0pct respectively. The expense rate during the period is 11.1%/-1.1pct, in which the rates of sales, management, R & D and financial expenses are 3.0%/-0.2pct, 4.9%/-0.9pct, 1.4%/+0.2pct and 1.9%/-0.2pct, the net return rate is 5.6%/-0.6pct, and the non-return net interest rate is 3.1%/-2.0pct.
In the past 21 years, the production and sales of knitted garments and fabrics have increased rapidly, while woven garments have declined. In 2021, the income of knitted garments is 2.283 billion yuan / + 34.1%, accounting for 44.27%/+8.06pct, the output is 35.42 million pieces / + 45.8%, the sales volume is 35.28 million pieces / + 48.9%, the income of woven garments is 1.488 billion yuan / + 2.1%, accounting for 28.9%/-2.1pct, the output is 21.7 million pieces /-2.9%, and the sales volume is 2170 pieces /-5.1%. Knitted fabric income is 552 million yuan / + 28.4%, accounting for 10.7%/+1.6pct, output is 19183 tons / + 54.3%, sales volume is 7062 tons / + 34.3%, woven fabric income is 429 million yuan / + 11.9%, accounting for 8.3%/+0.2pct, output is 53.28 million m / + 182.5%, sales volume is 24.49 million m / + 29.8%, yarn income is 262 million yuan /-17.7%, accounting for 5.1%/-1.7pct.
Ralph Lauren and Hugo Boss maintained rapid growth, while Uniqlo revenue declined. In 2021, the sales of the top five customers of the company in 2021 were 2.73 billion yuan / + 8.8%, of which Ralph Lauren's sales were 789 million yuan / + 42.2%, accounting for 789 million yuan / + 42.2%, accounting for 15.3%/+3.5pct, and returning to the largest customer. Uniqlo sales of 565 million yuan /-14.7% Lacoste sales of 545 million yuan / + 3.3% Lacoste sales of 515 million yuan / + 2.9% Hugo Boss replaced Shanghai Hezhao as the fifth largest sales customer. Huge Boss sales of 315 million yuan / + 20.9%. Looking forward to 2022, Ralph Lauren is expected to continue to recover, Zilai crocodile brand, HUGOBOSS, FILA knitted garments will continue to grow, Li Ning Co. Ltd. is expected to deepen cooperation. In 2019, the company cooperated with Li Ning Co. Ltd. brand and established a joint venture Guangxi Ningtai Garment Co., Ltd. (clothing manufacturing enterprise controlled by Li Ning Co. Ltd.). At present, the business of the company is developing smoothly. The company has also carried out in-depth cooperation with Li Ning Co. Ltd. in other aspects, and won its only "e-commerce support award" for the company's on-time delivery rate of 100% in 2021.
Convertible bond projects continue to expand production and improve efficiency, and vertical integration and informatization continue to be strengthened. The company plans to issue convertible bonds to raise no more than 850 million yuan to invest in the first phase of the 48000 tons of high-grade knitted fabric printing and dyeing production line project (220 million yuan), Vietnam 100, 000 yarn construction project (300 million yuan), Shengzhou Shengtai 22MWp distributed photovoltaic power station construction project (50 million yuan), information construction project (20 million yuan) and supplementary liquidity (260 million yuan). On the one hand, the company continues to strengthen the production capacity construction of knitted fabrics and yarns to enhance the vertical integration level of domestic and foreign bases. The fabric project raised and invested is located in Henan base. The first phase is expected to add 60 million tons of knitted fabric production capacity to meet the needs of local garment production. The yarn project is located in Vietnam base. On the other hand, the company continues to enhance information construction, upgrading through ERP/SAP system upgrade and shared financial center platform. Create a unified SAP system management platform for the company.
Profit forecast: Shengtai Group's operating income from 2022 to 2023 is expected to be 62.0 yuan and 7.37 billion yuan respectively, an increase of 20.2% and 18.9% over the same period last year. The net profit of home ownership is RMB 3.60 and RMB 440 million respectively (the previous forecast is RMB 3.6x and RMB 440 million respectively. Despite the disturbance of the epidemic in China, the company's customers have a global layout, strong anti-risk ability, and rapid knitting business development, so we maintain our forecast for 2022-2023). Year-on-year growth of 24.8%, 21.9%, corresponding to the latest valuation of 16.4x, 13.5x, to maintain the "overweight" rating.
Risk tips: the impact of the epidemic in East China exceeded expectations, domestic customer orders were lower than expected, raw material prices fluctuated, and capacity construction was less than expected.