Basic events
The company released 22Q1 results: 22Q1 achieved revenue of HK$4.566 billion (+2.2%, converted to 0.1% at fixed exchange rates), net profit of HK$344 million (-37.8%), flat domestic demand during the period, overseas Southeast Asia epidemic disturbance revenue growth, high raw material costs to suppress profit performance, short-term pressure on performance, waiting for revenue & profit improvement.
Investment essentials
The flat demand superimposed on the epidemic disturbed the growth rate of revenue, and the high level of raw materials suppressed the profit performance
In terms of segmentation business, the household paper revenue during the period was 3.671 billion yuan (+0.19%), the personal care income was 895 million yuan (+11.04%), and the pressure on revenue growth was mainly due to (1) the performance of domestic demand was flat, the industry competition intensified, the price strategy was aggressive, and the price increase landed at the end of Vinda 21, and the corresponding sales performance was flat; (2) the epidemic disturbance in Hong Kong & Malaysia. In terms of channel structure, the revenue of 22Q1 e-commerce/GT/KA/B2B channels was 16.89/ 12.78/ 10.95/ 502 million yuan, +4.99%/-1.37%/+2.15%/+2.15% year-on-year, accounting for 37%/28%/24%/11% respectively; 22Q1 Chinese mainland regional e-commerce / GT / KA / B2B channel revenue accounted for 45% / 23% / 22% / 10% respectively, and the proportion of e-commerce increased slightly by 1pct. In terms of profitability, the gross profit margin of 22Q1 is 33.11% (-5.79pct, +0.93pct month-on-month), and the high pressure factor of wood pulp cost has not been eliminated, but there has been a slight improvement trend in the case of smooth high-end progress &21 price increase; corresponding to 22Q1 net interest rate of 7.53% (-4.84pct, +0.14pct).
Waiting for the demand to repair & improve the performance after the decline in the raw material cost center
During the period, macro factors & the epidemic suppressed downstream demand, logistics were also blocked, waiting for post-epidemic demand repair; in terms of industry pattern, the sustainability of low-price promotion under high costs was weak, and the pattern was expected to accelerate concentration, benefiting Vinda leaders. In terms of profitability, 22Q1 pulp prices rebounded again, the average price of softwood pulp / hardwood pulp was 855, 652 US dollars / ton, +0.54% and +1.78% year-on-year, +11.04% and +10.32% month-on-month, short-term pressure still exists, but considering that overseas wood pulp supply capacity is expected to improve, the probability of pulp price decline in the medium term is larger, and the gross profit margin is expected to be repaired; in addition, the company's high-end is progressing smoothly, and new products such as washable kitchen paper, cotton tough luxury series, and clothing cleaning wipes have been launched within 21 years. At the same time, the production capacity of 140,000 tons of high-end paper products landed, and it continued to be optimistic about the increase in the proportion of high-end company, further driving the recovery of profitability.
Profit forecast
The company's operation is stable, the high-end is progressing smoothly & the position of e-commerce Dragon One is stable, the personal care category has begun to increase, and it continues to be optimistic about the company's market share. We expect revenue of HK$20.832, 230.51 and HK$24.499 billion for 22-24 years, +11.5%, 10.7% and 6.3% year-on-year, and net profit attributable to the parent of HK$16.17, 19.15 and HK$2.098 billion, up from -1.3%, +18.5% and +9.5% year-on-year, corresponding to PE 13.89X, 11.72X and 10.70X, maintaining a buy rating.
Risk Warning
Industry competition intensified, raw material cost fluctuations, new product promotion fell short of expectations
Chief Analyst of Light Industry Manufacturing Industry
Master of Engineering, Columbia University, USA. From April 2015 to March 2017, he worked in the research department of China Galaxy Securities, where he was engaged in the research of agriculture, forestry, animal husbandry and fishery industry, and joined soochow Securities Research Institute in April 2017 to engage in light industry manufacturing industry research, and has served as the chief of light industry manufacturing industry since 2018. In 2017, New Fortune Light Industry manufacturing industry ranked 5th, in 2019 New Fortune Light Industry and Textile and Apparel ranked 3rd, and in 2021 New Fortune Light Industry and Textile and Apparel ranked 2nd. In July 2020, he joined the Zheshang Securities Research Institute.
Mobile/WeChat: 18811064824
Ma Li Deputy Director of Zheshang Securities, Head of Large Consumption, Chief Analyst of Textile and Apparel Industry
He holds a bachelor's degree from Nanjing University and a ph.D. in economics from the Chinese Academy of Social Sciences, and currently works at the Zhejiang Securities Research Institute, and has worked for the China Textile Industry Association, China Galaxy Securities Research Department, and soochow Securities Research Institute. In 2019, New Fortune Light Industry and Textile and Garment ranked 3rd, Crystal Ball Textile and Garment Industry Ranked 1st; 2018 Textile and Garment Industry Crystal Ball Ranked 1st; 2016-2017 New Fortune Textile and Garment Industry Ranked 1st; 2015 New Fortune Textile and Garment Industry Ranked 2nd; 2014 New Fortune Textile and Garment Industry Ranked 4th; 2013 New Fortune Textile and Garment Industry Ranked 2nd; 2012 New Fortune Textile and Garment Industry Ranked 4th
Fu Jiacheng is a researcher in the light industry manufacturing industry
Bachelor of Investment, Master of Central University of Finance and Economics, worked at Soochow Securities Research Institute from July 2019 to May 2020, covering the light industry manufacturing industry, and joined Zhejiang Securities Research Institute in June 2020.
Shuyan Yang, researcher in the light industry manufacturing industry
With a bachelor's degree from Shanghai Jiao Tong University and a master's degree from the Hong Kong University of Science and Technology, he joined the Zheshang Securities Research Institute in March 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 13611883185
Disclaimer: The above content is for the reference of institutional investors only and does not constitute investment advice, and the company's value judgment shall be subject to the official report.
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