The main brands still contribute to the increase, and the epidemic and shipping tensions continue to disturb the company's report for the third quarter of 2021. 21Q1-Q3 achieved total operating income of 5.818 billion yuan, + 22.58% year-on-year, and home net profit of 311 million yuan, year-on-year-4.82% pint 21Q3 income and net profit-4.10% and-74.69% respectively compared with the same period last year. Since 2021, the company has returned to the health massage business, and the main domestic brands still contribute revenue elasticity, but in 21Q3, due to the tight situation of export shipping and the epidemic in Xiamen in September, the income has dropped slightly, and affected by the high prices of raw materials and shipping, profits are obviously under pressure. We adjusted the forecast of income and gross profit margin, and estimated that the EPS for 21-23 years will be 0.71,1.08,1.90 yuan (the previous value is 1.15,1.56 and 2.06 yuan). As of 2021-10-26, according to the consistent expectation of wind, the company will be given a 2021 average PEG of 0.55x PEG, corresponding to the target price of 15.31 yuan (the previous value is 31.89 yuan), maintaining the "buy" rating.
The epidemic and freight transport disturbed the export business, the domestic sales took the initiative to adjust, and the income of 21Q1, 21Q2 and 21Q3 of the short-term pressure companies were + 103%, + 6% and-4% respectively compared with the same period last year, and the income growth rate continued to be pressured. On the one hand, repeated epidemics in Fujian and the tense situation of container departure at overseas terminals continued to affect export revenue, on the other hand, the company's domestic OEM and some online business adjustments affected domestic sales. However, according to the domestic customs data, the export volume / volume of 21Q3 massage equipment industry is + 29.4% and + 19.6% respectively compared with the same period last year. As a leading export enterprise in massage equipment industry, the company cooperates closely with B-end customers, and Q4 revenue or all recovers as the tension in overseas terminals alleviates. At the same time, the company continues to strengthen the main brand online marketing, OGAWA brand extension online advantage growth trend. With the advent of the Singles Day sales season, the domestic independent brand business still has a good growth expectation.
21Q3 gross profit margin is heavily under pressure.
21Q1-Q3 's gross profit margin is 31.1%, year-on-year-5.60pct, of which 21Q3 gross profit margin is year-on-year-8.95pct. On the one hand, the epidemic and shipping tensions affect shipments leading to a decline in revenue, which in turn affects profits, on the other hand, the price of raw materials is high, and exports also face the impact of higher shipping costs.
Inventory turnover lengthened and 21Q3 sales expense rate increased
The price of raw materials rose, inventory turnover lengthened, and the number of 21Q1-Q3 inventory turnover days rose to 105 days (up 8.2 days compared with the same period last year). 21Q1-Q3, the company's overall expense rate decreased 2.58pct compared with the same period last year, but the 21Q3 sales expense rate rebounded more obviously.
Short-term profit pressure still exists
The short-term impact of high raw material prices will continue, or there will be a more obvious drag on full-year earnings. However, with the product iteration, the cost pressure is gradually digested, and the company takes the initiative to adjust part of the domestic brand business to build a long-term sustainable profit model, which is also conducive to the promotion of medium-and long-term brand profitability.
Risk tips: declining demand for health care massage, weak multi-business performance, RMB appreciation.