Xlinmen Furniture Co.Ltd(603008) (603008)
Event 1: the company issued the 2021 equity incentive plan (Draft), which is intended to be distributed to the company’s middle-level managers and core technologies 167 people including (business) backbones granted 4 million stock options, accounting for 1.03% of the company’s total share capital, and the exercise price was 31.16 yuan / share. Among them, 3.2 million shares were granted for the first time, accounting for 0.83% of the total share capital. The company further established and improved the company’s long-term incentive mechanism through the stock option incentive plan, realized the unity of interests and jointly promoted the growth of the company.
Event 2: the company released the employee stock ownership plan (Draft) for 2021. This employee stock ownership plan intends to raise no more than 350 million yuan to buy and hold the company’s shares. The participants are 42 directors (excluding independent directors), supervisors, senior executives and core backbone of the company, with a model of no more than 6.767 million shares (accounting for 1.75% of the total share capital), the stock source of this ESOP is the repurchase of shares by the company in September.
The assessment objectives correspond to the compound growth rate of income of 27.0% and profit of 40.1% in 20-24 years. The rapid growth shows development confidence. The assessment year of the equity incentive plan is 2022-2024, and the assessment objective is based on the performance in 2020. The growth rate of the company’s net profit in 2022-2024 is not less than 128%, 195% and 285% respectively, or the growth rate of operating revenue is not less than 66%, 108% respectively 160% (the corresponding net profit target is 714, 923 and 1205 million yuan, with an increase of 29.39% and 30.51% in 23 and 24 years; the revenue target is 9334, 11696 and 14620 million yuan, with an increase of 25.30% and 25.00% in 23 and 24 years). The equity incentive cost is expected to be amortized by 5.966 million yuan, 3.401 million yuan and 1.61 million yuan respectively in 22-24 years. The equity incentive and employee stock ownership plan is conducive to mobilizing the enthusiasm of employees and the assessment target is to meet the market expectation To fully demonstrate the company’s confidence in development.
Focus on the main business, promote the retail business of independent brands through all channels, and be optimistic about the continuous improvement of China’s market share. 1) Excluding the impact of film and television business stripping, under the same caliber, the company’s revenue in the first three quarters of 2021 was 5.043 billion yuan, a year-on-year increase of 52%; 21q3 achieved a revenue of 1.94 billion yuan, a year-on-year increase of 32%. Among them, In the first three quarters of 2021, the revenue of independent brand retail business was 3.271 billion yuan (+ 85%), and the revenue of 21q3 was 1.279 billion yuan (+ 58%), driving the company’s performance to achieve high growth. 2) on the channel side, the company continued the sinking pace of channels, opened stores faster and expanded against the trend. By the end of the third quarter, the company had a total net increase of 653 stores. With offline specialty stores and online platforms as the core and supplemented by distribution stores and community stores The “1 + n” Omni channel sales network has gradually taken shape. 3) Since focusing on the main business, the refinement of the company’s products, brands and channel management has continued to improve, and the company is optimistic about the company’s independent brand business, which continues to Nuggets China mattress track in large quantities.
The marginal real estate policy is loose, and the national development and Reform Commission encourages the implementation of furniture and home decoration subsidies to the countryside, which is expected to boost terminal demand. On December 8, the routine policy briefing of the State Council pointed out in the “14th five year plan” to promote agricultural and rural modernization that it will promote the upgrading of rural residents’ consumption echelon, implement rural consumption promotion actions, encourage qualified areas to implement furniture and home decoration subsidies to the countryside, and promote the renewal of durable consumer goods for rural residents. Referring to the previous policy experience of “home appliances to the countryside”, as an important part of stimulating domestic consumption, the subsidy policy for furniture and home decoration to the countryside is expected to boost the demand of the terminal market, and the company is also expected to benefit first.
Investment suggestion: the company focuses on the main furniture industry, builds its own brand and omni-channel sales network, and is expected to continue medium and high-speed growth. We expect that the company’s sales revenue from 2021 to 2023 will be RMB 7.52 billion, 9.48 billion and 11.9 billion, with a year-on-year increase of 33.7%, 26.1% and 25.5%, and the net profit attributable to the parent company will be RMB 540 million, 730 million and 930 million (the profit forecast was raised, and the previous forecast values were RMB 540 million, 650 million and 760 million), with a year-on-year increase of 73.5%, 33.9% and 27.9%, and EPS of RMB 140, 188 and 240, maintaining the “buy” rating.
Risk tips: the risk of decline in the prosperity of real estate, the risk of higher than expected cost investment, and the risk of intensified industry competition
