DEA shares (301177)
Core view: the rise of DEA shares is not a simple flow dividend. The three elements of its business cornerstone come from “accurate positioning + agency structure + network effect”. These three points can explain the company’s “high penetration + high pricing + possible first mover advantage”, which is the root of the company’s becoming a phenomenal dark horse.
The company’s brand connotation innovation of “men only give one person a lifetime” has built three elements of business cornerstone. Penetration: behind the company’s high penetration rate of more than 10%, it is precisely positioned in the mind of “loyal love” and forms a binding by using the sales model of “only one person in a lifetime”. From the perspective of evolutionary psychology, this positioning meets the real psychological needs of women, so the penetration rate increases rapidly. Pricing: behind the company’s 70% gross profit margin is its products as the carrier of “loyalty”. Different from consumers, buyers have agency mechanism, so they have strong pricing power; First mover advantage: behind the company’s expectation of establishing first mover advantage, its business model has two network effects: one is mental consensus, and the other is the self strengthening of data authentication platform.
Flow dividend and sales model further amplify the degree of financial excellence. “Only one person in a lifetime” is the business cornerstone of the company. On this basis, the company makes full use of the traffic dividend, gives full play to the effect of Internet marketing, and makes the business scale grow rapidly. Through the innovation of brand connotation, the sales core was changed from spot display to concept recognition, so that the company’s “customization + self operation” sales model could run through, retained the profits of the whole link, ensured the turnover efficiency, and realized more than 50% roe before fund-raising.
The driving force of short-term growth has shifted from online to offline stores, which has entered a test period for the company’s operation. We believe that with the gradual withdrawal of the bonus of short video traffic and the completion of the coverage of online accessible people, the company needs to gradually establish an offline marketing network to form a stable customer acquisition and sales channel. In the short term, with the switching of growth drivers, the company’s performance is not expected to continue the explosive growth in the past. However, with the expansion of offline stores and the gradual occupation of users’ minds, the company is expected to enter a stable growth period.
For the first time, give a “overweight” rating. We expect the company’s revenue from 2021 to 2023 to be 4.64/62.0/7.94 billion yuan respectively, with a year-on-year increase of 88.2% / 33.6% / 28.2%; The net profit attributable to the parent company was 1.32/17.8/2.25 billion yuan, with a year-on-year increase of 133.5% / 35.3% / 26.4%; EPS is 3.29/4.45/5.62 yuan, corresponding to PE is 31.3/23.1/18.3, which is covered for the first time and rated as “overweight”.
Risk tips: (1) the risk of the company’s failure to maintain the “only one person in a lifetime” mode; (2) Risk of loss of flow dividend; (3) The risk of falling more than expected number of marriages; (4) Risk of brand concept imitation; (5) Risk of information lag
