Kingclean Electric Co.Ltd(603355) (603355)
Independent brands: expand high growth categories, brand matrix and accelerate channel transformation
The company’s own brand matrix has been preliminarily completed, with multiple brands covering cleaning appliances, small kitchen appliances, drinking machines and other categories in an all-round way. In the field of clean electrical appliances, Jimmy and lake have dual brand layout, and launched a variety of new products, such as power wireless vacuum cleaners, floor washers and other high-profile racetracks; From the perspective of industry prospect, China’s clean electrical appliance market is still in the climbing stage of penetration, and the development prospect of related categories is broad; From the perspective of competition pattern, emerging categories such as floor washing machines are still in the early stage of development, and the overall pattern is still highly variable; In terms of product strength, the company’s core motor technology is in a leading position among similar products. In the future, it will continue to increase R & D investment, and the product strength will be further improved. In the field of drinking machine, Biyun spring is the best, realizing the “brand definition category”. In the field of kitchen appliances, Huang Xiaochu has created a new and younger brand, created a popular product intelligent cooking machine, and successfully extended the category. In the future, as the company continues to make efforts to build its own brand, broaden the moat of product power, and continue to promote channel online transformation and improve brand power, its own brand is expected to usher in rapid growth.
ODM: the layout category is upgraded, the marginal cost is improved, and the profit is expected to be repaired
The company is a leading manufacturer of vacuum cleaners in the world. Since the outbreak, the global manufacturing industry has continued to transfer to China, and the company’s ODM business has fully enjoyed the development dividend and achieved sustained growth. At the end of the industrial chain, the concentration of global vacuum cleaner brands is low. As a leading enterprise in the upstream manufacturing field, the company has stronger bargaining power; On the demand side, the wireless vacuum cleaner has become a global trend. The company’s ODM business actively arranges relevant high customer unit price and high profit categories to help the continuous growth of ODM business; On the cost side, the cost structure of the company’s clean electrical products is relatively diversified, and the profits are affected by the rise of commodity prices. In the future, as the short-term effects such as raw materials, shipping and exchange rate fluctuations subside, ODM profits are expected to be repaired.
Parts: new energy tuyere, high-quality track, and the company has increased its capacity layout
In recent years, the company has entered the aluminum alloy die casting track of new energy vehicles: from the perspective of industry space, with the birth of the demand for aluminum alloy steam zero by automobile lightweight and the accelerated penetration of new energy vehicles, the future space of aluminum alloy steam zero of new energy vehicles has great prospects; From the perspective of competition pattern, a number of new energy vehicle manufacturers such as new car manufacturers have emerged, and the manufacturing process of Chinese enterprises is gradually mature. The existing competition pattern of aluminum alloy auto zero is expected to be reshaped; Combined with its years of production experience, the company is expected to fully enjoy the development dividend of the industry. At present, the company’s relevant production capacity has been saturated. The company actively expands the relevant production capacity through epitaxial M & A and internal expansion, which is expected to become a new growth point of revenue and performance in the future.
Investment suggestion: the company’s own brand, core parts and ODM OEM business have increased this year. The brand matrix of some private brand companies has been improved. This year, a number of new land washing machines have been launched, and the online transformation of channels has been accelerated; In terms of core parts, the company aims at the high growth track and is involved in the manufacturing of core parts of new energy vehicles. With the implementation of Pajie acquisition plan and the production of new production capacity in the future, it is expected to contribute new increment to the company’s revenue; In terms of ODM, the rise of bulk raw materials, shipping, exchange rate and other short-term factors have disturbed the company’s profit level since this year. If the subsequent short-term impact subsides, ODM profit is expected to recover. We expect the net profit of the company to be RMB 680 million, RMB 1.02 billion and RMB 1.21 billion respectively in the 21-23 years (the previous value is RMB 640 million, RMB 890 million and RMB 1.12 billion). Considering the large business differences of the company, we use the segment valuation method for valuation. With reference to comparable companies, in 2022, pe27x-30x will be given to independent brands, pe12x-15x will be given to ODM, pe28x-30x will be given to parts, and the corresponding target share price will be RMB 38.55-43.24, maintaining the “buy” rating.
Risk tips: exchange rate fluctuations affect export business risks; Risk of domestic sales not meeting expectations; Price fluctuation risk of raw materials; The penetration of new energy vehicles is less than the expected risk, etc.
