\u3000\u3 China Vanke Co.Ltd(000002) 154 Baoxiniao Holding Co.Ltd(002154) )
Core view
Company profile: After twists and turns, it returned to the development track after 2017 Baoxiniao Holding Co.Ltd(002154) holdings was established in 2001 and listed on Shenzhen Stock Exchange in 2007. From 2013 to 2016, subject to multiple factors such as the decline of industry prosperity + e-commerce impact + overseas brand competition, the company’s main clothing industry faced major challenges, superimposed with the failure of diversified investment, resulting in a net loss of 390 million in 2016. After 2017, the company returned to its main business and reversed its difficulties. From 2017 to 2020, the CAGR of Baoxiniao Holding Co.Ltd(002154) , haggis and BAONIAO were 5.6%, 23.5% and 23.2% respectively. The net interest rate will also increase to 10% in 2020. In 2021, the shareholding ratio of the chairman of the board of directors increased (the total shareholding with those acting in concert increased from 25.86% to 38.09%), which is optimistic about the long-term development of the company.
We believe that Baoxiniao Holding Co.Ltd(002154) main brands, haggis and BAONIAO will be the main growth points of the company in the future:
1) Baoxiniao Holding Co.Ltd(002154) main brand (accounting for 35% of revenue in 2020): emphasize “brand upgrading” and “rejuvenation”, and the prospect of differentiated categories of sports suits is promising. In 2020, the company signed Zhang Ruoyun, the hero of the hot drama Qingyu, as the brand spokesperson. He also gradually subverted the young people’s inherent cognition of the commercial men’s clothing brand “the old flavor of the local flavor” through various fashion activities, and completed the upgrading of the brand younger. Benefiting from the industry-leading flexible supply chain, the company is leading in the development of customized business. In addition, through the development and promotion of sports suits, the company has gradually broken through the pain points of low-frequency and functional consumption of traditional suits.
2) haggis brand (accounting for 33% of revenue in 2020): moderately accelerate the expansion of channels + increasingly rich categories, which is expected to continue high-quality growth. The reasons for haggis’s rapid growth in China in the past few years are as follows: 1) successful localization of products based on in-depth understanding of Chinese consumers; 2) Channel expansion is steady and steady, and attention is paid to the profitability of a single store; 3) High frequency exposure, effective marketing, enhance brand awareness. We believe that the brand has broad prospects for growth in the future. The main growth points are as follows: 1) there is a large space for expanding stores, benchmarking Biem.L.Fdlkk Garment Co.Ltd(002832) , haggis is expected to open about 1000 stores in the medium and long term, and the third and fourth tier cities and distribution stores are the focus of expansion; 2) Increasingly rich categories, including luggage category, golf category, etc; 3) Expand store area and improve store efficiency.
3) BAONIAO brand (accounting for 21% of revenue in 2020): Sunshine procurement promotes the industry concentration, actively expands production and ensures future growth. BAONIAO is a well-known professional clothing group buying brand in China. The epidemic in 2020 led to a high increase in BAONIAO’s income (a year-on-year increase of 39%). If the impact of epidemic prevention materials is excluded, the CAGR in 20182020 is about 15% (24% if not excluded), which is higher than that of peers. In 2021, it will take the initiative to expand production in Anhui. After it is put into operation, it is expected to produce 1 million sets of high-end professional clothes per year to ensure long-term growth in the future.
In terms of other brands, lefeiye and kemiche brands have a long history. The revenue CAGR from 2017 to 2020 was 17% and 18% respectively, mainly driven by the growth of the same store, with high growth quality; In the future, offline stores will have a large expansion space and are expected to achieve growth relay.
Profit forecast and investment suggestions
We predict that the company’s earnings per share from 2021 to 2023 will be 0.33, 0.44 and 0.57 yuan respectively. With reference to the average valuation of comparable companies, we will give the company 14 times PE in 2022, corresponding to the target price of 6.16 yuan, and give a “buy” rating for the first time! Risk tip: the epidemic situation is repeated, the economy slows down, the epidemic trend changes, the main brand is younger and the process of product differentiation is lower than expected
