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中泰国际:予VESYNC(02148)“买入”评级 目标价11.1港元

Sino-Thai International: target price of HK $11.10 for VESYNC (02148) "buy" rating

智通財經 ·  Dec 28, 2021 23:22

Zhitong Financial APP learned that Zhongtai International released a research report giving VESYNC (02148) a "buy" rating, cutting FY21E/FY22E net profit by 3.2 per cent and 4 per cent respectively to $67 million and $93 million, respectively, due to lower-than-expected sales in the fourth quarter and uncertainties on the cost side in 2022. At the same time, based on the market atmosphere, the valuation target price multiple is reduced to 18 times forward earnings, and the target price is based on FY22E18 times earnings, which is HK $11.1.

The main points of Sino-Thai International are as follows:

Orders slowed in the fourth quarter, lowering the annual revenue forecast

The bank learned from management that Amazon.Com Inc's terminal sales were still booming in the third quarter, up 40 per cent from a year earlier, up 60 per cent in November and 30 per cent in December. But on the other hand, Amazon.Com Inc VendorCentral (VC) inventory rose, from the original 1.5 months to nearly 2 months, and in the fourth quarter due to the rising unemployment rate in the United States, living subsidies decreased, Amazon.Com Inc in the inventory at the same time, VC channels issued orders growth began to slow down. The company cut its full-year revenue forecast from 40% year-on-year growth to 35% year-on-year growth. The bank expects VC channel order growth to slow to low double digits in the fourth quarter.

The proportion of tariffs in the second half of the year is higher than that in the first half of the year,

Customs expenses accounted for about 2% of the total cost in the first half of the year, but increased to 5% of the cost in the second half of the year. The main reasons are:1)Some of the terminal sales in the first half of the year were last year's inventory, and last year the company's products benefited from the tariff exemption policy.2)The proportion of products with higher tariffs (such as air purifiers, fryers, humidifiers and filters) has increased this year, so higher tariffs have been paid. The bank forecasts a gross profit margin of 39.9 per cent for the second half and a slight reduction to 41.8 per cent for the full year from 42.3 per cent. Net profit for the second half is expected to be $35 million, up 10.1 per cent from a year earlier.

2022 the launch of new products and the changing trend of sea freight are the key.

Profit focus in 2022:1)New products on the market2)The impact of changes in sea freight rates on operating expenses. The company launched a new humidifier Dual200S in 2021, and the market feedback is good. Other humidifier products will be added in 2022, and sales are expected to double. New products such as air fryers and indoor barbecue air fryers were launched in November 2021, and sales are expected to continue to rise in 2022. Products such as ultra-high-end air purifiers, vacuum cleaners, coffee makers and small blenders will be launched in 2022 to help stimulate sales.

High sea freight rates will increase the company's operating expenses, and Vesync plans to negotiate with Amazon.Com Inc to adopt other trade methods in the second quarter of 2022. If the sea freight remains high next year and the company succeeds in passing on the transportation fee to Amazon.Com Inc, although it will have a slight adverse impact on revenue (Amazon.Com Inc will be given a greater discount), it will not have a negative impact on net profit and save transportation and management expenses at the same time.

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