Report guide
The company released its 2021 annual report. In 2021, the company achieved operating income of 826 million yuan, +43.52% year on year; net profit of the mother was 98 million yuan, +18.15% year on year. Among them, Q4 achieved operating income of 218 million yuan, +44.01% year on year; net profit returned to the mother was 14 million yuan, -7.04% year on year. Revenue growth exceeded market expectations, maintaining the “buy” rating.
Key points of investment
Overall revenue in '21 was +43.52%, and the revenue from the glass door business was +56.95%. In 2021, the company achieved operating income of 826 million yuan, +43.52% year on year; it achieved net profit of 98 million yuan to the mother, +18.15% year on year. Among them, Q4 achieved operating income of 218 million yuan, +44.01% over the same period last year, and achieved net profit of 14 million yuan to the mother, -7.04% year on year. Excluding the influence of the newly merged company Qingdao Weisheng, the company's main glass door business achieved revenue of 666 million yuan in '21, +56.95% year on year; Guimu's net profit was 101 million, +18.16% year on year.
Among them, Q4 achieved operating income of 177 million, +63.53% year on year, and net profit of the mother was 16 million, +3.04% year on year.
The revenue of the main glass door business soared, exceeding the market's unanimous expectations.
The rapid development of commercial refrigerators and the continuous expansion of market share have driven the company's revenue to exceed expectations as a sales link for commercial cold chain terminals. The rapid development of the cold chain, the transformation of retail formats, and the active seizure of traffic by downstream beverage vendors have driven the rapid expansion of the refrigerator industry. Glass doors, as the core component of commercial freezers (accounting for 25% of the cost), have taken advantage of the wind to bring opportunities. However, the company's core competitive advantages stand out: 1) strong R&D capabilities and technical advantages continue to lead the industry under the trend of intelligent and high-end upgrading of beverage cabinets; 2) integrated production and manufacturing advantages, the ability to respond quickly to customer needs, leading the industry, and at the same time significantly controlling costs and reducing fees, and profitability is stronger than competitors; 3) scale advantage. The company's listing and convertible bond fund-raising projects are gradually settled. The output value in '22 is expected to reach 1.2 billion dollars, solving production capacity bottlenecks 11-8-10 times for industry competitors, while the scale effect brings a high cost advantage. Under its strong competitive advantage, the company's absolute leading position has become more stable, and its market share continues to increase, driving the company's revenue to exceed expectations.
The profit side of rising raw materials is under pressure in the short term, but I am optimistic about the release of profitability as the company's growth and scale effects increase
Affected by the rise in raw materials in the third and fourth quarters of '21, the company's costs were under pressure. Combined with the new acquisition of Qingdao Weisheng Mao in '21, the net interest rate was low. After the consolidated statement, the profit margin level was greatly affected. The company's gross profit margin in '21 was 18.87%, and the net profit margin was 11.55%. However, after excluding the influence of Qingdao Weisheng, the gross profit margin of the company's glass door business was 22.27%, -7.82 pc over the previous year (t of which the accounting standards changed, and freight transfer costs affected gross margin by about -3 pct); the net interest rate was 15.12%, the year-on-year -4.90 pct (but it should be noted that the company's high net interest rate level in 20 years had an impact on entrusted financial management, with a steady net profit level of about 16%-17%).
However, we believe that with the return of orders from the company's old domestic customers and the expansion of new customers, the superposition logic of going overseas begins, and we are still optimistic about the company's subsequent growth. At the same time, the main raw materials of the cost side company are glass (50% +), aluminum (about 15%), and PVC (about 15%). We believe that with the improvement in raw material prices in '22, the combined scale effect of cost reduction, and the improvement in profits of Qingdao Weisheng, the company's profitability will gradually be unleashed.
Profit forecasting and valuation
Raw material prices rose rapidly in Q3 and Q4 in '21, and the company's profit side was under pressure, but we are optimistic about the subsequent release of profitability as the company's growth and scale effects increase. The company's revenue for 2022-2024 is estimated to be 10.49/1279/1,590 million yuan respectively, and the corresponding growth rate is 27.07%/21.82%/24.38% respectively; the net profit of the mother is 1.47/192/248 million, respectively, and the corresponding growth rate is 49.70%/29.92%/29.61% respectively. The corresponding PE is 13x/10x/8x, respectively.
Risk warning
New customer expansion falls short of expectations, and there is a risk of fluctuations in raw material prices.