Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
event
On December 14, the company announced event 1: due to capital demand, Haitong asset management, which holds more than 5% of the shares and is not the largest shareholder, plans to reduce its holdings of no more than 6.323 million shares by means of centralized bidding within 90 days from January 7, 2022, accounting for 1% of the total shares of the company.
Event 2: the company plans to invest 1.03 billion yuan to build a production base in Monterrey, Mexico. The project is expected to start in the first half of 2022. The construction period of the project is 36 months. It is expected that the first phase of the project will be completed and put into operation in the middle of 2023. When the overall project reaches the goal, it is expected to achieve a revenue of 3.02 billion yuan.
make a concise evaluation
The internationalization strategy is further deepened, and the share of export market is expected to increase: due to the impact of trade war and mattress anti-dumping, the tax rate of Chinese household exports to the United States is high, especially the two rounds of mattress anti-dumping, which makes the previous Xibao factories in Malaysia unable to export to the United States. The company’s new production base in Mexico will better avoid the high tax rate caused by trade friction, better improve the responsiveness to the needs of customers in North America, shorten the delivery cycle and improve the competitiveness of obtaining OEM orders as a whole. In addition, the company proposes to try to promote the construction and sales of its own brand with the nature of franchise in some Southeast Asian countries, and develop the market in the form of Direct stores, franchise independent stores and in store stores in Hong Kong, ASEAN, Australia, India and other markets. On the whole, the further deepening of the company’s internationalization strategy is expected to jointly promote the trend improvement of the company’s overseas market share and further open the growth space from the two businesses of OEM and private brand.
The pressure of building a digital chemical plant + raw materials is relieved, and the elasticity of export profit is expected: the company’s net export interest rate is expected to drop to 0-5% in the first three quarters of this year due to the rise of raw materials superimposed shipping prices. This time, the Mexican base will be built into an intelligent digital chemical plant to realize intelligent control of the whole production process, which is expected to greatly reduce production costs and improve the profitability of the company. At present, the price pressure of raw materials has eased, and the price of MDI / TDI / polyether in China on December 14 decreased by 30.5% / 19.2% / 31.5% respectively compared with the high point of this year. On the whole, the profit elasticity of the company’s export business next year can be expected.
The fundamentals of domestic sales are still stable, and the growth of three high potential categories is expected: in recent years, the company has continued to deepen the transformation and upgrading of channels and stores in China, and gradually improved the operation of regional retail centers. The company’s integrated sales advantages of all categories are becoming more and more obvious. It is in the stage of evolution from category brands to household brands, whether in terms of channels, brands, categories, organizational structure, etc, The company has been in the leading position in the era of big home. In the short term, the three high potential categories of customization + function + mattress are growing rapidly, and the certainty is significantly improved. In the medium and long term, further iterative optimization of channels promotes the integration of more categories, and the long-term growth path of the company is becoming clearer.
Investment advice
We maintain the previous profit forecast. It is estimated that the EPS from 2021 to 2023 will be 2.73 yuan, 3.32 yuan and 4.06 yuan respectively, and the corresponding PE of the current stock price will be 25X / 21x / 17x respectively, maintaining the “buy” rating.
Risk statement
Category integration progress is lower than expected; The price of raw materials has increased significantly; The efficiency of overseas factories is lower than expected.
