Basic events
The company released the 2021 semi-annual report: 21H1 achieved revenue of 2.513 billion yuan (+42.97%, year-on-year 19H1+24.96%), net profit attributable to the mother of 128 million yuan (+410.60%, year-on-year 19H1 +79.6%), deduction of non-attributable net profit of 116 million yuan (+547.73%, year-on-year 19H1 +95.84%).
21Q2 achieved revenue of 1.364 billion yuan (+48.53%, year-on-year 19Q2+35.59%), net profit attributable to the mother of 0.67 billion yuan (+997.44%, year-on-year 19Q2 + 11.67%), deduction of non-attributable net profit of 0.67 billion yuan (+646.16%, year-on-year 19Q2 + 17.54%).
Investment essentials
The iteration of new products has driven the growth of overseas business, and the transformation of domestic "new Qumei" has gradually entered a better situation
(1) Overseas Ekrnes business: 21H1 achieved revenue of 1.612 billion (+46.54%), net profit of 208 million, and net profit margin repaired to a higher level of 12.9%; among them, the sub-brand Stressless/IMG/Svane achieved revenue of 1.1.78/3.24/110 million yuan respectively, +42.56%/+64.75%/+42.80% year-on-year, corresponding to gross profit margin of 49.99%/38.96%/38.96% respectively. 19.55%。
(2) Domestic Qumei business: 21H1 Qumei business achieved revenue of 920 million (+37.69%), adhered to the "three new transformation", brand upgrade, the channel upgrade as the focus of work, store upgrade achieved remarkable results, home improvement + bulk rapid development, become a new growth point, gross profit margin of 33.22%.
Domestic sales: The retail transformation has achieved remarkable results, and Ekornes has been smoothly integrated into domestic channels
(1) Qumei New Retail: The single Q2 of the 2C business achieved double-digit growth, and the single value of ping, customer unit value and single store revenue increased significantly, with the single value of dealer channels exceeding 35,000 yuan and the single value of directly operated stores exceeding 39,000 yuan. Thanks to the company's "fashion home" brand and product upgrades, store image upgrades three-pronged approach, the transformation has achieved remarkable results.
(2) Ekornes localization: 21H1 Ekornes in the Chinese market continued rapid growth, order growth rate of more than 70% year-on-year, of which Stressless achieved revenue of 37.51 million, order growth rate of more than 90%, the number of stores in the Chinese market is close to 100, in addition, IMG brand has also begun to open brand independent stores (has been opened & the number of decoration reached 40), dealers generally feedback that the profit situation is better.
(3) Engineering & home improvement new channel development: 21H1 B2B engineering business to achieve revenue of more than 50 million yuan (20H1 basically no), real estate business customers are mostly state-owned enterprises, central enterprise background, cash flow, account period, payment guarantee has a strong guarantee; home improvement business began to accelerate the acquisition of large home improvement company channel resources.
Overseas: New products are recognized by the market, and breakthroughs have been made in the business of major customers
(1) Research and development of new explosive products: Ekornes' new management attaches importance to product research and development after taking office, 2 new products enter the list of top 10 best-selling styles in 21H1, and the new sofas, dining chairs, and comfortable chairs have bright performances.
(2) Smooth business transformation of key customers: The list of the top 20 customers added 8 new customers, accounting for 10% of the total sales of The Stressless and IMG brands, and it is expected to cooperate with more major customers in the future.
As of the end of June 2021, Ekornes has accumulated orders of 2.574 billion (+65%, an increase of 59% over 2019) in 2021. Looking forward to 21H2, overseas business will maintain a high growth in anticipation of the full recovery of overseas supply chains and continuous recovery of downstream demand.
Interest expenses have been significantly compressed, and profitability is expected to continue to improve under the scale effect
In 21H1, the company achieved a gross profit margin of 41.35% (-1.87pct, year-on-year 19H1-2.35pct), mainly due to raw material price fluctuations and a sharp increase in shipping costs, but still achieved a net profit margin of 5.70% (+7.94pct, year-on-year 19H1+1.30pct), thanks to the year-on-year compression of the expense ratio during the period under the scale effect: 21H1 Company's expense ratio during the period was 34.76% (-9.14pct), of which the sales expense ratio was 22.15% (-2.8pct), management expense ratio of 8.61% (-2.7pct), financial expense ratio of 4.00% (-3.5pct), single Q2 interest expense of 0.56 billion (20Q2 is 0.81 billion), with the reduction in debt size is expected to continue to decline. The company adjusted the product price in late June, and is optimistic that the profitability of 21H2 will continue to improve.
Earnings forecasts and valuations
The company's domestic and foreign business volume, profit improvement gradually cashed in, it is expected that in 2021-2023, the company will achieve revenue of 5.523 / 66.78 / 7.951 billion yuan, an increase of 29.08% / 20.91 % / 19.07%; attributable net profit of 3.48 / 4.91 / 629 million yuan, the same increase of 234.99% / 41.13% / 28.19%, corresponding to PE is 16.64X / 11.79X / 9.2X, giving a buy rating.
Risk Warning
Raw material prices have risen sharply and the real estate boom has declined
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, It ranked 5th in the manufacturing industry of New Fortune Light Industry and 3rd place in 2019. 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
Mobile/WeChat: 15601975988
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
Dushan, researcher of light industry manufacturing industry
With a bachelor's degree from Zhejiang University, a master's degree from the University of Illinois and the University of Chinese of Hong Kong, Shenzhen, he joined the Zheshang Securities Research Institute in May 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 15306560432
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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