Xlinmen Furniture Co.Ltd(603008) (603008)
Mattress leading brand, deeply ploughing the sleep Market
The company is a leading enterprise in China’s mattress industry, focusing on R & D, design, production and sales of high-quality furniture with mattresses as the core. At present, the company is in the stage of rapid expansion of channels and categories. In the next 3-5 years, the company plans to open 800-1000 new stores every year, promote systematic sales, integrate categories, and improve customer unit price and store efficiency. With the help of increasing brand investment, the company’s performance is expected to improve rapidly. We predict that the net profit attributable to the parent company from 2021 to 2023 will be 507 / 722 / 953 million yuan, corresponding to EPS of 1.31/1.86/2.46 yuan, and the corresponding PE of the current stock price will be 27.7 / 19.4 / 14.7 times respectively. The company will be given a “buy” rating for the first time.
The market scale has been improved, the leading advantages have been highlighted, and the policies have been improved to catalyze the upgrading of marginal consumption
The global production and sales of upholstered furniture increased steadily. The growth rate of the Chinese market was higher than that of the global market. The size of the sofa and mattress market continued to grow steadily. From 2010 to 2019, the size of the Chinese mattress market also increased from 27.4 billion yuan to 65.2 billion yuan, with a CAGR of 10.11%. With the increase of disposable income of Chinese urban residents, the consumption level is also gradually improved, and the mattress and sofa market is expected to further expand. At the same time, the internal structure of the software industry is undergoing changes, the concentration is increasing, and the advantages of leading companies are prominent. In terms of policy, the real estate policy continues to release adjustment signals, which is conducive to the improvement of future real estate sales and completion data, driving downstream furniture consumption. The policy of furniture and home decoration to the countryside is expected to boost rural consumption, and the prosperity of standard products such as mattresses and sofas is expected to improve.
With mattresses as the core, multi category, multi-channel and diversified marketing contribute to growth
Products: take the mattress as the core, focus on bedroom products, dig deeper into the bedroom space, and expand to soft beds and accessories. Strengthen R & D investment, promote product upgrading and enhance competitiveness; Enter the sofa Market through extension, improve the product matrix, and promote the growth of sofa business. Channel: carry out long-term strategic cooperation with large household stores, increase the area of stores and promote the rapid expansion of stores; New stores extend to street stores and shopping centers, enter the blank market and increase the density of stock market; Launch “Ximian” series products and actively layout the sinking market. It is planned to open 800-1000 new stores every year in the next 3-5 years; Multi category integration and systematic sales, improve product connection rate, increase store efficiency and profitability while ensuring the speed of opening stores. Marketing: explore various new retail forms online, covering various consumer groups in an all-round and multi platform way; Large scale IP promotion activities are held offline, and “honeymoon Xlinmen Furniture Co.Ltd(603008) ” has become a unique brand culture; Increase brand investment, name large variety shows, sign contracts with well-known artists, and improve brand strength.
Risk tip: real estate policy risk, production capacity and demand are lower than expected.
