2021-10-27 Tianfeng Securities Co., Ltd. Bao Rongfu and Wang Tao conducted research on Mona Lisa and published the research report “Maintaining Good Revenue Growth During Difficult Times, Looking Forward to a Recovery in Performance”. This report gave Mona Lisa a buying rating, believing that its target price was 28.34 yuan, the current stock price was 20.01 yuan, and the expected increase was 41.63%.
Mona Lisa (002918)
21Q3 maintained good revenue growth and maintained a “buy” rating
The company achieved revenue of 4.927 billion yuan, yoy +47.7%, and net profit of 420 million yuan, yoy +10% in 21Q1-3. It maintained a 19.3% year-on-year revenue growth rate during the difficult period of the industry in the third quarter alone, but the net profit of the return mother fell 16.9% year on year, or was mainly affected by rising costs. The company's net CFO amount for the first three quarters was 130 million yuan, a year-on-year decrease of 0.1 billion yuan, and a net outflow of 300 million yuan for the third quarter alone. We believe that the ceramic tile industry was affected by multiple factors such as electricity restrictions, rising raw fuel costs, and declining real estate conditions in the third quarter. In a difficult period, the company maintained good revenue growth, which fully demonstrated the resilience of B/C two-wheel drives to risks. We believe that if the pressure on the cost side falls back in '22, the company's profitability is expected to recover. We are optimistic about its ability to grow sustainably in the medium to long term, and maintain its “buy” rating.
Revenue maintained steady growth, and profitability declined significantly in a single quarter
The company's Q1-3 single-quarter revenue growth rate was +106%/+60%/+19.3%. Compared with the growth rate of 65%/108%/72% in the same period in 2019, the Q3 revenue growth rate declined somewhat. We think: 1) On September 14, the company announced that 7 production lines in Guangxi were affected by electricity restrictions, and 2 production lines were still affected after September 21; 2) Downstream real estate in the third quarter was affected by capital, and the boom declined markedly. At the same time, purchase restriction policies had a large impact on second-hand housing transactions, putting pressure on both sides of the company's B/C growth. The net profit growth rate for the Q1-3 single quarter was +18.93%/+32.85%/-16.87%, and the Q3 net profit margin was 7.6%, down 2.89pct from the previous year. The large year-on-year decline in profitability led to negative Q3 quarterly performance growth.
Q3 gross margin may be mainly affected by the cost side, and the pay-to-profit ratio has declined
The gross profit margin of Q3 companies in Q3 alone was 30.1%, down 5.84pct from the previous year, and the sales/management/financial/R&D expenses ratio changed -1.36/+0.63/+0.62/-0.23pct. The credit impairment loss calculation for a single quarter was basically the same as the same period in 2020. Q1-3 The company's gross margin decreased by 3.46 pct year on year, and the sales/management/financial/R&D expenses ratio changed year on year - 1.54/+0.52/+0.51/+0.09 pct. We believe that the pressure on the company's profitability is mainly due to the large increase in crude fuel prices since this year. If the price of raw fuel falls marginally in 2022, the company's profitability is expected to bottom out and rebound. If the price of raw fuel in Q4 is relatively stable month-on-month, then the downward pressure on profitability is also expected to weaken significantly year on year. Q1-3's payout ratio was 91.67%, down 7.89pct from the previous year. We believe that the company has plenty of cash on hand, and that financial stability is outstanding during the downturn in real estate. If real estate financing improves marginally in the future, the company's cash flow is expected to benefit.
21Q3 may be the most difficult period. We look forward to a subsequent recovery in profit and maintain the “buy” rating
We believe that the 21Q3 industry faces many adverse factors. The high base further intensifies the downward pressure on profitability, and the Q4 pressure is expected to ease. Considering downstream demand and the high pressure currently facing the cost side, we lowered the company's profit forecast for 21 years, but we are still optimistic about 22/23 growth. We expect EPS of 21-23 to 1.43/2.18/3.03 yuan (previous value 1.80/2.40/3.06 yuan). Currently, compared with the company's 22-year Wind, 12.5 times PE, the company's higher C-side share is expected to bring better reporting quality and growth robustness. It is given 13 times PE in '22, corresponding to the target price of 28.34 yuan, maintaining the “buy” rating.
Risk warning: the increase in crude fuel prices and timing exceeded expectations; the decline in B-side real estate demand exceeded expectations; the impact of electricity restrictions and emission reduction policies on the company's production and costs exceeded expectations.
The stock has been rated by a total of 20 institutions in the last 90 days, buying 16 ratings and increasing holdings by 4; the average institutional target price for the past 90 days is 42.61; the Securities Star valuation analysis tool shows that Mona Lisa (002918) has a good company rating of 3.5 stars, a good price rating of 4 stars, and an overall valuation rating of 3.5 stars.