\u3000\u3000 Guangdong Dongpeng Holdings Co.Ltd(003012) (003012)
Guangdong Dongpeng Holdings Co.Ltd(003012) is mainly engaged in ceramic tiles, with gross profit accounting for nearly 90%. It is one of the earliest and largest leading enterprises of old Ceramic Tile Sanitary Ware brands in China. The company has a nationwide sales network, production and supply network. The company has good cash flow level and low debt ratio. Over the years, the net profit margin has always been at the highest level in the industry, and has maintained steady development for a long time.
The ceramic tile industry is in the development stage of increasing concentration. The low growth stage of real estate has brought about the decline of the total demand for ceramic tiles, intensified the industry competition, put forward more updated requirements for products by consumption upgrading, the promotion of environmental protection policies such as "double carbon" and energy consumption targets, and increased the cost of developing small and medium-sized enterprises, all of which have accelerated the survival of the fittest in the ceramic tile industry. From 2016 to 2020, the number of Enterprises above designated size decreased by 571, down 32.1%. The demand space for ceramic tiles in China is about 300-400 billion, but the market share level and scale of leading companies are very small, which is far behind that of foreign countries. The revenue of leading Weimei group is only 10.9 billion, accounting for less than 4%, while the revenue of MHK in the United States is about 25 billion, accounting for 50%. There is huge room for the scale and market share of China's leading and excellent companies.
Full coverage of supply and marketing network and brand strength improve the company's market share and growth certainty. The dual mode of direct selling and distribution drives the current development direction of enterprises, and the distribution mode is the cornerstone of long-term development. The company has a mature and sinking sales network cultivated for many years. The number of dealers and stores far exceeds that of Listed Companies in the same industry, and the single store income is high. The company's production base is arranged nationwide, and the central warehouse and sales warehouse near the base are arranged nationwide to reduce the transportation cost. Set up shared warehouses in large dealers. Form a benign interaction with the distribution network, help the sinking of the sales network in the third and fourth tier cities, and speed up the inventory turnover; Help the acquisition and extension development and outsourcing capacity expansion of the whole country, improve the scale advantage, and bring about the continuous decline of the company's cost. Superimposed with many years of brand advantages, it ensures the company's abundant cash flow and high profitability, helps to improve the company's market share, and ensures the company's long-term sustainable and steady development and growth certainty.
Profit forecast and investment rating of the company: we predict that the net profit of the company from 2021 to 2023 will be -96 million yuan, 1089 million yuan and 1399 million yuan respectively, and the corresponding EPS will be -0.08, 0.91 and 1.18 yuan respectively. We are optimistic that the company's full coverage of supply and marketing network and old brand strength will bring the stability of the company's development, certainty of growth and huge development space. We will give a "strongly recommended" rating for the first time.
Risk tip: the debt crisis of real estate companies exceeded expectations and the change of real estate policies was less than expected.
