\u3000\u3000 Kidswant Children Products Co.Ltd(301078) (301078)
With more than ten years of innovation and development, it has become the leading professional retail of mothers and infants. About 90% of the company’s main business has become the sales of medium and high-end mother, child and child goods. In addition, it also provides value-added services such as mother and child services and supplier services. The gross profit margin of value-added services is high, and the proportion of revenue increases slightly year by year. After turning losses into profits in 2017, it continued to make profits and its operating capacity was significantly enhanced. Through “scientific and technological power + humanized service”, the company has rapidly developed into a subversive and benchmarking enterprise in the maternal and infant retail industry.
The impact of the decline in fertility on maternal and infant consumption is limited, and there are still large structural opportunities in the industry. China’s birth rate has declined and the demographic dividend has gradually subsided, but the growth momentum of the mother and child consumer market remains. The CAGR reached 13.36% from 2014 to 2019 and is expected to reach 3.25 trillion yuan in 2020. The increase of residents’ disposable income leads to the enhancement of purchasing power, which is superimposed on the change of mother and child consumption concept. Consumption upgrading has become an important driving factor to stimulate mother and child consumption demand. At the same time, the maternal and infant consumption market in low-level cities has more growth potential, but the retail chain rate of maternal and infant is very low, and the sinking market has great room for expansion. In addition, through the counter trend development of xisongwu in Japan, we believe that the decline of fertility does not necessarily lead to the decline of the company. On the contrary, companies with better business ability will gain counter trend growth and even obtain higher market share in the industry reshuffle.
Omni channel integration + heavy membership mode + Digital overweight build solid barriers to support the long-term development of the company. Omni channel: continue to build an omni channel sales network and promote channel integration to provide a good shopping experience. The proportion of online sales increased from 10.7% in 2018 to 30.8% in 2020; The offline first large store mode adopts the operation mode of “goods + services + social”, forming a unique competitive advantage. By the end of the 20th year, 434 stores had been arranged, and the pace of opening stores at a high speed will still be maintained in the future. Membership: the company creates a “single customer economy” model and adopts a heavy membership model to enhance customer stickiness. By the end of the 20th century, the number of members had exceeded 42 million, and the consumption of members accounted for more than 98%. However, compared with its peers, the company’s member customer list value is low, and there is still a lot of room for exploration. Digitization: the company has built a digital platform system to empower customers, employees and management, and greatly improve customer service ability, management ability and operation efficiency. High R & D investment and strong R & D team provide technical support, which will continue to enable business development in the future.
Investment suggestion: we estimate that the net profit of the company from 2021 to 2023 will be 204 million yuan, 350 million yuan and 586 million yuan respectively, and the corresponding EPS will be 0.21, 0.36 and 0.6 yuan respectively. At present, the PE values corresponding to the stock price are 107, 62 and 37 times respectively. It is optimistic that the company will seize the structural opportunities of the industry, achieve steady growth, cover for the first time and give a “recommended” rating by virtue of its advantages in channel, membership system construction and digital construction.
Risk tips: the epidemic has repeatedly affected, the speed of opening stores is lower than expected, and the birth rate continues to decline significantly.
