Zhejiang Nature: Increasing production capacity and expanding categories drives performance growth, and the cost pressure needs to be digested internally
Views：881 Updated：2022-05-24
The outbreak of the outdoor products market has brought a number of listed companies to the forefront, and it has also magnified investors' anxiety about the growth rate. At the performance briefing held on May 23, the management of Zhejiang Nature stated that the release of production capacity of Vietnam projects and the expansion of product categories are the main driving forces for the company's growth. In order to maintain stable profitability, the company has raised prices this year, but the pressure of price increases for some raw materials still remains. Internal digestion is required.
Stepping on the east wind of the outdoor products industry, Zhejiang's natural performance growth rate is dazzling. In 2021, the company will achieve a revenue of 842 million yuan, a year-on-year increase of 44.91%; a net profit attributable to the parent of 220 million yuan, a year-on-year increase of 37.59%, with stable profits. In the first quarter of this year, the company's revenue and net profit attributable to the parent continued to grow, with a year-on-year increase of 38%-47%.
The high degree of prosperity also attracts brokerage institutions to "get together" rating. The Zheshang Light Industry team believes that the company's performance in the first quarter of this year exceeded expectations, and analyzed that Zhejiang naturally has high barriers in the TPU field, bringing high bargaining power, and the price increase driven by raw material price increases is expected to be reflected in 2022.
The company level is relatively cautious about the wording of cost shifting. Dong Yimin, secretary of the board of directors, said at the meeting that the company's sales quotation in 2022 has been increased, which will offset the pressure of rising costs to a certain extent, but to maintain stable profitability, it is also necessary to internally digest cost pressure through cost reduction and efficiency improvement. It is reported that the company's main raw materials include TPU particles, TPU films, fabrics, TDI and other petrochemical products.
A number of research reports pointed out that Zhejiang naturally mastered key processes and technologies such as TPU film and fabric composite technology, polyurethane (PU) soft foam foaming technology, high-frequency welding technology, and hot-pressing welding technology. Benefiting from this advantage, the company has established long-term cooperative relationships with world-renowned outdoor brands such as Decathlon, and has become the main supplier of the latter's air mattresses.
However, the actual barriers to the above-mentioned key processes and technologies may still remain to be observed. At the meeting, a reporter from the Financial Associated Press asked: "Can the company export technology to the outside world? How wide is the application range of technology?" But no reply was received. Regarding the application mode of TPU materials, Dong Yimin only said that TPU is mainly for personal use and will not be sold to the public for the time being.
At present, the global outdoor products industry is still growing. According to data from the China Research Institute of Industry Research, the global outdoor products industry revenue in 2020 is expected to reach US$236.34 billion, with a CAGR of about 6.86% from 2021 to 2025.
However, in the huge market, Zhejiang Natural's products appear to be relatively small, and the market size of its main product air mattress still lacks reliable statistics. In order to further expand the categories, the company's management stated that the inflatable mattresses, waterproof bags and thermal bags, and inflatable water sports categories in the household and leisure fields are the focus of development, and there have been phased results. In terms of capacity improvement, the company's Vietnam project has been put into production at the end of 2021, and is currently in the ramp-up stage of production capacity. With the release of production capacity, the delivery capacity of waterproof luggage will be further improved.
