Xiamen R&T Plumbing Technology Co.Ltd(002790) (002790)
A leading OEM enterprise of sanitary products, expanding from sanitary accessories to intelligent sanitary ware.
Xiamen R&T Plumbing Technology Co.Ltd(002790) was established in 1999. Since its establishment, it has been committed to the R & D, production and sales of bathroom accessories. After more than 20 years of development, the company ranks first in the market share of flushing components in China and the top three in the global market share of flushing components. Its products are gradually from sanitary accessories to integrated intelligent sanitary products. Benefiting from the rapid volume of new smart toilet business, the company's revenue in the first three quarters of 2021 reached 1.309 billion yuan, a year-on-year increase of + 66.46%, the highest level in history; The net profit attributable to the parent company was 111 million yuan, with a year-on-year increase of + 46.56%. The profit side was affected by the price of raw materials, and the growth rate was less than that of income, but it still maintained a high level. With the decline of raw material prices and the implementation of price increase, the profit side is expected to improve, and the medium and long-term trend will remain upward with the growth of income.
The intelligent toilet industry is in the early stage of development and has a large market expansion space.
With the continuous improvement of Chinese residents' living standards, the public's demand for intelligent bathroom products is growing rapidly, and intelligent bathroom enterprises continue to launch more detailed and personalized functions. China's intelligent bathroom industry has shown explosive development in the Chinese market after 2012. According to AI media consulting, the sales volume of intelligent toilets in China has increased from 3.4 million in 2015 to 8.21 million in 2020, The average annual compound growth rate is 19.28%. It is estimated that the sales volume of intelligent toilets will reach 9.1 million units in 2021, but the current penetration rate is less than 2%. Compared with developed countries such as Japan, the United States and South Korea, there is much room for improvement, and the future development of the industry can be expected. Among them, domestic brands are expected to realize curve overtaking by providing more localized products, power E-commerce & Engineering and other new channels.
The advantages of technology, products, customers and production capacity are leading, and the production capacity of raised investment is released one after another.
The company has been deeply engaged in the sanitary ware industry for more than 20 years, and its annual R & D expenditure accounts for about 4% of its revenue. At present, it has formed a strong product R & D and design capacity. The product side has expanded from bathroom accessories to high value-added intelligent bathroom new business through leading technical level, and the product structure has been continuously optimized; The channel side cooperated steadily with core customers, introduced new products and developed new customers, and the OEM business maintained good growth. In addition, the company vigorously developed its own brand business, and the brand value continued to appear; At the production capacity side, fund-raising projects have been put into operation, among which the intelligent toilet project is expected to be put into operation next year to meet the strong order demand of downstream customers and the market, and the future development can be expected.
The short-term disturbance factors are alleviated, and the full orders help the high growth.
Affected by the sharp rise in the prices of engineering plastics and other raw materials, the company's profitability declined in the first three quarters of 2021. At present, the short-term disturbance factors are gradually alleviated. The price of upstream raw materials has continued to decline since mid October. The company has gradually implemented the price increase of products this year, and its profitability is expected to continue to rise. In addition, the company's orders are full at present. In the early stage, due to the tight shipping capacity, the company's order delivery cycle is lengthened. At present, the shipping capacity is gradually alleviated, and the shipping price has been falling since October, which helps the company shorten the delivery cycle of overseas orders and help the company maintain high growth.
Investment suggestions:
We continue to be optimistic about the rapid improvement of the penetration rate of the smart toilet. The company's smart toilet OEM business has full orders and its own brand has made rapid efforts. The profitability of the profit side continues to improve with the exertion of the scale effect. We expect the company's operating revenue to be RMB 1.776/2.472/3.121 billion and EPS to be RMB 0.38/0.65/0.88/share respectively from 21 to 23, according to the closing price of RMB 9.70/share on December 14, 2021, The corresponding PE is 25 times, 15 times and 11 times respectively. It is covered for the first time and given a "buy" rating.
Risk tips:
Risk that the volume of new businesses such as intelligent toilet is lower than expected; The impact of sharp fluctuations in raw material prices; Risk of intensified industry competition; The impact of continued tension on maritime transport.
