Event: on August 24, 2022, the company released its semi-annual report of 2022. The total operating income in the first half of the year was 3.153 billion yuan, down 20.07% from the same period last year. The net profit attributed to shareholders of listed companies was 13 million yuan, down 94.86% from the same period last year. The net profit after deducting non-return to the mother was 16 million yuan, down 92.14% from the same period last year.
Main points of investment:
Under the influence of multiple factors, the company's performance in the first half of the year is under pressure. The total operating income of the company in the first half of 2022 was 3.153 billion yuan, down 20.07% from the same period last year. The net profit attributed to shareholders of listed companies was 13 million yuan, down 94.86% from the same period last year. The net profit after deducting non-return was 16 million yuan, down 92.14% from the same period last year. Of this total, Q2 achieved revenue of 1.57 billion yuan in the single quarter, down 16.05% from the same period last year. The net profit attributed to shareholders of listed companies was-14 million yuan, down 109.20% from the same period last year. The net profit after deducting non-return was 35 million yuan, down 69.76% from the same period last year. The company's performance is under pressure, which is expected to be mainly as follows:
1) under the macro background of the conflict between Russia and Ukraine and high inflation in the United States, the global market shrank sharply and consumption was weak; 2) the epidemic situation in China and Southeast Asia was repeated and the offline consumption boom was low; 3) the upstream raw materials and shipping prices remained high.
Focus on the main business of health massage and strengthen brand leadership. In the face of the downward trend of the economy, the company persisted in focusing on its core business and continued to reduce and spin off its non-core business. Revenue from other products fell 42.73% in the first half of the year compared with the same period last year. The revenue of the health massage business reached 2.262 billion yuan, down 13.16% from the same period last year, which is better than the overall income performance of the company. Among them, the revenue of massage chairs reached 1.354 billion yuan, down 15.04% from the same period last year. The "OGAWA O'Jiahua" brand further improves the layout of online and offline channels in the domestic market, and strengthens brand promotion through accurate advertising to the target audience, and through measures such as "localization" of the management team, grasping promotion nodes, and launching cost-effective products in overseas markets, sales revenue in Malaysia and Singapore is growing against the trend, with 13.38% of sales revenue in Malaysia and Singapore respectively compared with the same period last year. In July, the national standard for massage chairs, as the first drafting unit, was officially released, strengthening the company's position as a technical leader in the field of massage chairs. The revenue of massage small electric business reached 909 million yuan, a slight decline of 10.21% compared with the same period last year. The company appropriately tilted the superior resources to massage small electrical appliances, accelerated the product innovation and marketing promotion of massage small electrical appliances, and created new revenue growth points. The healthy environment business, which includes products such as fresh air systems and air purifiers, achieved revenue of 490 million yuan, down 24.38% from the same period last year.
Gross profit margin ushered in marginal improvement, maintaining high R & D investment. In the first half of 2022, the company achieved a sales gross profit margin of 29.32%, a year-on-year decline of 3.77 pcts and a month-on-month improvement of 2.63 pcts compared with 21H2, mainly because the price of raw materials is still at a high level.
In terms of period expenses, in the first half of the year, the company's sales expense rate and management expense rate increased by 1.94 pcts to 17.51% and 6.54% respectively compared with the same period last year; the financial expense rate decreased by 2.47 pcts to-0.79% compared with the same period last year, mainly due to exchange rate fluctuations; the R & D expense rate was 4.28%, up 0.72 pcts from the same period last year, and the company maintained a large amount of investment in R & D. In the end, the company recorded a net sales interest rate of 0.41%, a decline of 7.01 pcts.
Downgrade earnings forecast to "overweight" rating. External macro factors have a great impact on the company's performance in the first half of 2022. We downgrade our profit forecast for the company. It is expected that the net profit from 2022 to 2024 will be RMB 2.51cm 4.34 / 522 million (the previous value is RMB 623,725 million). Compared with the same period last year, the corresponding price-earnings ratio is 19 times, 11 times and 9 times respectively. Downgrade the investment rating to "overweight".
Risk hint: raw material price fluctuation risk, exchange rate fluctuation risk.