Central air conditioning fans grow steadily, while building ventilation fans grow rapidly.
Release time:
2021-05-27
From January to June 2013, the company achieved operating revenue of 300 million yuan, a year-on-year increase of 22%; achieved operating profit of 46.22 million yuan, a year-on-year increase of 20%; and net profit attributable to shareholders of the listed company was 37.84 million yuan, a year-on-year increase of 19%. The basic earnings per share for the period was 0.28 yuan/share. At the same time, the company expects a net profit growth of 10%-30% attributable to the parent company shareholders from January to September. Comment: The demand in the downstream central air conditioning market is recovering, and the company's air conditioning fan products are returning to stable growth. Additionally, the company has promoted its brand in the building ventilation field for many years, and it is gradually gaining recognition from customers, leading to rapid growth in building ventilation fan revenue, overall performance.
From January to June 2013, the company achieved operating revenue of 300 million yuan, a year-on-year increase of 22%; achieved operating profit of 46.22 million yuan, a year-on-year increase of 20%; and net profit attributable to shareholders of the listed company was 37.84 million yuan, a year-on-year increase of 19%.
The basic earnings per share for the period was 0.28 yuan/share. At the same time, the company expects a net profit attributable to the parent company's shareholders to grow by 10%-30% from January to September.
Commentary:
The demand in the downstream central air conditioning market has recovered, and the company's air conditioning fan products have resumed stable growth. At the same time, the company has promoted its brand in the building ventilation field for many years, gradually gaining recognition from customers, leading to rapid growth in building ventilation fan revenue, and overall performance meeting expectations.
The central air conditioning industry is experiencing a recovery in demand, and the expansion of the building ventilation fan market is proceeding smoothly, with the company's operating revenue increasing by 22% year-on-year.
In the first half of the year, the company achieved operating revenue of 300 million yuan, a year-on-year increase of 22%. Among them, revenue from central air conditioning fans and accessories was 192 million yuan, accounting for 65% of product revenue, with a year-on-year increase of 11.65%. Revenue from building ventilation fans was 44.88 million yuan, accounting for 15%, with a year-on-year increase of 48%. Additionally, water trays and other products accounted for 13% and 6%, respectively.
The growth in revenue from central air conditioning fans and accessories in the first half of the year was mainly due to the recovery of the central air conditioning industry. The monthly sales growth rate in the central air conditioning industry was around 10%, and the revenue growth rate for the company's central air conditioning fans was basically in line with the industry growth rate. Additionally, the company's acquisition of a 51% stake in Fuli Hua contributed an increase in operating revenue of 28.64 million yuan, affecting the revenue growth rate by 11.6 percentage points and contributing a net profit of 1.37 million yuan attributable to the parent company's shareholders, contributing a profit growth rate of 4.3 percentage points. The company integrated its existing customer channels with those of Fuli Hua, and the synergy in customer channels is also beneficial for the company and Fuli Hua's customer expansion.
The rapid growth in revenue from building ventilation fans in the first half of the year was mainly due to the company's long-term expansion in the building ventilation field, leading to increased customer recognition of the company's product quality. At the same time, the company made appropriate price adjustments based on changes in raw material prices, enhancing the price competitiveness of its products.
Additionally, the company officially launched its DC brushless motor products in April and is currently promoting trials to customers. The company's DC brushless motors are mainly used for fan sales, and the market size for motors paired with fans is more than twice that of the fan market. If market promotion goes smoothly, it will become an important profit growth point for the company starting next year.
With the decline in raw material costs, the gross profit margin of air conditioning fans has improved. In the first half of the year, the company's overall gross profit margin was 36.3%, an increase of 1.94 percentage points compared to the same period last year. By product, the gross profit margin for air conditioning fans and accessories increased by 3.21 percentage points to 38.87%, while the gross profit margin for building ventilation fans was 32.59%, a year-on-year decrease of 5 percentage points, and the gross profit margin for water trays was 26.51%, a year-on-year increase of 3 percentage points.
The main reason for the increase in the company's gross profit margin is the decline in raw material prices. The raw materials and components purchased by the company mainly include galvanized sheets, cold-rolled sheets, motors, and bearings, with raw material costs accounting for over 80% of total costs. The company's product price adjustments generally lag behind changes in raw material prices; therefore, in the context of declining raw material prices, the gross profit margin has significantly increased compared to the same period last year.
In the first half of the year, the company's total period expenses amounted to 56.84 million yuan, a year-on-year increase of 29%. The period expense ratio increased from 17.94% to 18.93%, an increase of 0.99 percentage points. The significant increase in selling and administrative expenses was mainly due to increased employee compensation and the impact of consolidating Fuli Hua, while the financial expense ratio decreased due to reduced interest expenses after fundraising.
Due to the significant increase in gross profit margin and the slight rise in period expense ratio, the company's overall net profit margin in the first half of the year was 13.05%, an increase of 0.11 percentage points year-on-year, indicating a slight improvement in profitability.
A significant increase in accounts receivable has led to low operating net cash flow.
At the end of the period, the company's accounts receivable amounted to 170 million yuan, an increase of 24% compared to the beginning of the period. The company's inventory at the end of the period was 122 million yuan, an increase of 15% compared to the beginning of the period, and both the accounts receivable turnover rate and inventory turnover rate have decreased. Due to the significant increase in accounts receivable, the cash received from sales of goods and services in the first half of the year was 237 million yuan, with a ratio to operating revenue of only 79%, and the net cash flow from operating activities was only 29% of the net operating income.
Profit Forecast and Rating
The company has a solid market position in the central air conditioning fan industry, with significant expansion potential in the building ventilation fan field, and the new product, the DC brushless motor, is promising. It is forecasted that the company will achieve net profits attributable to the parent company's shareholders of 92 million yuan, 110 million yuan, and 132 million yuan from 2013 to 2015, corresponding to EPS of 0.68 yuan, 0.81 yuan, and 0.97 yuan, representing year-on-year growth of 24.1%, 19.5%, and 20.3%, respectively. The current stock price corresponds to a PE of 20.2 times for 2013, maintaining the company's 'Buy' rating.
Risk Warning
The risk of a slowdown in real estate investment leading to insufficient demand in the central air conditioning industry; the risk of building ventilation fan market expansion falling short of expectations.
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