Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
Jason Furniture (Hangzhou) Co.Ltd(603816) : in the past 40 years, the industry has been deeply cultivated and globalization has moved forward steadily. Since its establishment in 1982, its business has gradually expanded from sofa products to soft beds, mattresses, mahogany furniture, customized furniture and other categories. The company implemented the professional manager system in a forward-looking manner, and successively introduced a number of professional manager teams with high educational level and strong governance ability with rich experience in home appliances, retail and furniture from the outside world to help the rapid development of the company. At present, the company has six product series and a brand matrix that can meet the needs of different consumer groups. Globalization and whole house strategy are advancing steadily.
The prosperity of domestic and foreign demand continues, and the Chinese market has more potential. (1) Domestic sales: the retail scale of China’s soft furniture has grown steadily, with a growth rate higher than the global average. According to Euromonitor data, the CAGR of China’s mattress / sofa retail sales in 2010-2020 was 11.06% and 7.37% respectively, and the CAGR of global mattress / sofa retail sales in the same period was 2.19% and 1.28% respectively. The industry concentration has increased, and the competitiveness of local brands has improved. Euromonitor data shows that China’s mattress CR8 has increased from 2011 7.07% in 2020 to 18.66% in 2020. Benefiting from the upgrading of China’s consumption, the release of the demand for the renovation of existing houses and the rise of new ideas such as “renting but also decorating”, the correlation between China’s soft furniture consumption and the real estate cycle has gradually weakened, and the rise of both volume and price has boosted the continuous expansion of the industry. (2) Export: China is a big exporter of soft furniture, with a high proportion exported to Europe and America. From May 2020 to may 2021, the real estate sales in the United States are hot, and the inventory of wholesalers is relatively low, so the demand for furniture products is strong.
Excellent management ability, deep internal skills, and solid barriers in the channel brand industry chain. The company’s advanced professional manager system and perfect talent training system and incentive mechanism have effectively laid the foundation for the company to continuously deepen its competitive advantage in all links. (1) Channel side: the number of channels is leading, the operation capacity is flexible, and the information construction of regional retail centers and stores provides sufficient momentum for the company’s store efficiency growth; (2) product and brand side: multi category layout and good product echelon, the company’s large home strategy promotes industry leadership, and the growth trend of both volume and price is expected to continue; (3) Industrial chain and capacity layout: the company has a vertical layout of the whole industrial chain to improve production efficiency, reduce cost and increase efficiency. Horizontal global capacity construction helps the company improve delivery efficiency and rapidly expand market share.
The company has high aspirations, makes continuous progress and maintains the “buy” rating. We continue to be optimistic about Jason Furniture (Hangzhou) Co.Ltd(603816) . Under the leadership of the excellent management team, we will continuously expand our categories, optimize the brand matrix and upstream and downstream industrial chains, improve our competitive advantage, and are expected to accelerate the capture of market share in the domestic and export market, cross the real estate cycle and climb to the peak. We maintain the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.686/2.106/2.576 billion respectively, the corresponding EPS will be RMB 2.67/3.33/4.07 respectively, and the corresponding PE of the current stock price will be 25 / 20 / 17 times. Maintain the “buy” rating.