\u3000\u3000 Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) (002705)
Core view
Event: the new Mopei brand floor washing machine is on the market for pre-sale today, and the arrival price of tmall flagship store is 2599 yuan.
The new Mopei washing machine adopts water dust circulation technology, with outstanding differentiation highlights. Different from the air dust technology path of mainstream brands such as Tianke and Shitou, moffy floor washing machine adopts water dust circulation technology, which has differentiated advantages such as light weight (3.9kg net weight), long service life (80min), low noise (60dB) and no exhaust emission. Compared with water dust competitors such as dripping water, moffy floor washing machine has larger water tank capacity (880ml clean water tank and 900ml sewage tank) The advantages such as longer endurance reflect the company’s deep R & D and manufacturing advantages as the leader of ODM of global small household appliances.
There is still room for improvement on the cost side. With the gradual implementation of price increase, the profitability is expected to be repaired steadily. The price rise of raw materials, the rise of sea freight, the appreciation of RMB exchange rate and other factors lead to the pressure on the cost side in 2021. The specific improvement time point in the short term is true and difficult to predict, but there is still the possibility and space for further easing in the future. Since 2021, the company’s domestic and foreign sales have started several rounds of price increases, the landing process will be gradually reflected, and the profitability is expected to be steadily repaired upward.
Export sales are expected to resume steady growth, and domestic independent brands are expected to contribute new increment. Relying on its strong manufacturing capacity and continuous expansion of category matrix, the company’s export revenue is expected to grow steadily; In terms of domestic sales, Mofei has actively arranged new life products such as air purifiers, steam mops and floor washers. In the follow-up, with the steady increase of the company’s new product research and development efforts and the speed of innovation, the independent brand is expected to continue to contribute new increment.
Profit forecast and investment suggestions
Appropriately raise the assumption of export gross profit margin in 2023. We predict that the net profit attributable to the parent company from 2021 to 2023 will be 860 million, 1092 million and 1.325 billion (originally predicted to be 861 million, 1093 million and 1.272 billion). The average PE of comparable companies after adjustment in 2022 is 17 times. Considering that the company, as the global ODM leading enterprise of western small household appliances, has outstanding advantages in R & D and manufacturing, and is expected to continue to incubate competitive new products, the domestic independent brand matrix represented by Mofei has a high growth period, giving the company a valuation of 20 times P / E ratio in 2022, with a premium of 15% (maintenance) compared with comparable companies, Corresponding to the target price of 26.42 yuan, maintain the “buy” rating.
Risk tips
The lack of innovation ability of new products in China leads to the risk of earnings falling short of expectations and valuation decline; Risk that ODM order demand of overseas small household appliance brands does not meet expectations
