20211221-招银国际-VESYNC-02148.HK-FY22E_guidance_maintained_but_we_are_prudent_6页_1mb

Vesync (2148 HK) Company Update Summary

Core Content Overview

Vesync, listed as 2148 HK, is a home appliance company that has maintained its FY22E guidance but has adjusted its forecasts to be more conservative due to global supply chain issues. The company's long-term growth strategy, including offline and overseas expansion, remains intact.

Main Points

• FY21E Guidance Revisions:

  • Sales growth target revised down to 35% YoY from 40% YoY.
  • Net profit margin expected to be around 13% due to increased shipping costs and import tariffs.

• FY22E Guidance:

  • Sales growth target remains at 40% YoY, but CMBIS forecasts only 30% YoY, which is more conservative.
  • Net profit margin expected to improve slightly to ~14%, driven by cost stabilization and operational efficiencies.

• Target Price Adjustment:

  • Target price (TP) trimmed to HK$11.30 from HK$15.60, based on a 20x FY22E P/E ratio.
  • Current price is HK$9.01, representing a +25.4% upside from the new TP.

• Earnings Summary:

  • Revenue is projected to grow from USD 171,919k in FY19A to USD 755,203k in FY23E.
  • Net profit is expected to increase from USD 6,372k in FY19A to USD 114,009k in FY23E.

• Earnings Revision:

  • CMBIS estimates show a revision in earnings for FY21E to FY23E, with net profit adjusted down by 10.2%, 9.4%, and 8.1% respectively.
  • The company's gross margin and net profit margin are projected to improve slightly over the forecast period.

• Valuation:

  • Vesync is currently trading at 16x FY22E P/E or 0.5x PEG, which is considered undemanding.
  • The company maintains a BUY rating, but with a more conservative outlook due to ongoing global supply chain issues.

• Peer Valuation:

  • Peer companies like Js Global Lifestyle and Midea are also listed with BUY ratings.
  • Vesync's P/E and P/B ratios are lower than the industry average, indicating potential undervaluation.

Key Financial Assumptions

• Sales by Region:

  • North America: Expected to grow at 26.4% in FY22E.
  • Europe: Projected to grow at 50.0% in FY22E.
  • Asia: Projected to grow at 60.0% in FY22E.

• Sales by Segment:

  • Seller Central: Expected to grow at 15.0% in FY22E.
  • Vendor Central: Projected to grow at 29.5% in FY22E.
  • Others (including offline): Projected to grow at 100.0% in FY22E.

• Operating Expenses:

  • A & P: Expected to decrease by 3.1% in FY22E.
  • Commission to platform: Expected to decrease by 3.9% in FY22E.
  • Staff costs: Expected to decrease by 6.7% in FY22E.
  • R&D: Expected to decrease by 4.1% in FY22E.

• Net Profit Margin:

  • Expected to increase from 13.3% in FY21E to 15.1% in FY23E.

Financial Summary

• Income Statement:

  • Revenue is projected to increase significantly from USD 171,919k in FY19A to USD 755,203k in FY23E.
  • EBIT is expected to grow from USD 8,251k in FY19A to USD 129,504k in FY23E.
  • Net profit is expected to rise from USD 6,372k in FY19A to USD 114,009k in FY23E.

• Cash Flow:

  • Net cash from operating activities is projected to increase from USD -1,260k in FY19A to USD 157,359k in FY23E.
  • Net cash from investing activities is expected to be negative, with capex and investments decreasing from USD -1,833k in FY19A to USD -2,266k in FY23E.
  • Net cash from financing activities is expected to decrease from USD 2,372k in FY19A to USD -1,025k in FY23E.

• Balance Sheet:

  • Total net assets are projected to increase from USD 16,394k in FY19A to USD 522,137k in FY23E.
  • Shareholders' equity is expected to grow from USD 16,394k in FY19A to USD 522,137k in FY23E.

Key Ratios

• Sales Mix:

  • North America: 80% in FY22E.
  • Europe: 17% in FY22E.
  • Asia: 3% in FY22E.

• Profit Margins:

  • Gross margin is expected to increase from 15.6% in FY21E to 17.1% in FY23E.
  • Operating margin is projected to rise from 15.3% in FY21E to 17.2% in FY23E.
  • Pre-tax margin is expected to increase from 13.3% in FY21E to 15.1% in FY23E.

Conclusion

Vesync maintains its BUY rating despite revised guidance and a more conservative target price. The company's growth strategy remains robust, with strong expectations for offline and overseas expansion. However, investors are advised to wait for global supply chain stabilization before accumulating shares, as the current valuation is considered undemanding.