\u3000\u3 Shengda Resources Co.Ltd(000603) 816 Jason Furniture (Hangzhou) Co.Ltd(603816) )
Key investment points
The two-phase shareholding increase plan is bound to core dealers and has sufficient confidence in long-term development
Gujia dealers’ participation in the increase of shares of listed companies shows that they have full confidence in the rapid development of acting gujia brand, and are expected to be dominated by large merchants with strong financial strength (there is a certain investment threshold for participating in the increase of shares). There is no price range for this increase, and the main body of the increase chooses the opportunity to implement it. If it is estimated that the increase in shares is about 146292 million shares according to today’s closing price of 68.59 yuan, accounting for 0.23% – 0.46% of the total share capital. This plan is the second phase, and the first phase of dealer shareholding plan will be completed in March 2020 (102 million shares increased by 0.4%, and the main body is Yingshui investment). Through the combination of stock ownership and long-term development of dealers, we can form a long-term incentive plan for dealers and share the interests of dealers.
The growth momentum of domestic sales in the past 22 years is still abundant, and the profit margin of export sales is expected to improve
Domestic sales: same store + store expansion drive growth. In the 21st year, the company’s channels continued to sink and encrypt, and new series stores such as functions and customization opened rapidly. It is expected that the caliber of series stores will increase by 1000 + stores, and the plan of opening 8001000 stores will continue to be promoted in the 22nd year. At the same time, the increase in the proportion of large stores has boosted the linkage rate among various categories, the expansion of customized categories has increased the customer unit value, and the regional retail operation has improved the conversion rate. It is expected that the same store will increase by 20 +%, with excellent performance, so as to ensure that the domestic sales will maintain a growth rate higher than that of the industry in 22 years.
Export: effectively respond to tariffs and anti-dumping, and improve the profit margin of export. In December, the company announced that it planned to invest 1.037 billion to build a production base in Monterrey, Mexico. The project will start in 2022h1 with a construction period of three years. The first phase is expected to start production in mid-2023. At present, the Vietnamese factory of the company can only cover 30% – 40% of the business to the United States (accounting for about 20% of the total revenue). The Mexican base will improve the coverage and reduce the profit loss caused by tariff / anti-dumping. At the same time, the Mexican base will help the company increase high-end SKU production, consolidate its export position and improve its market share.
The organizational structure continues to upgrade, and the domestic operation is retail
1) in October, the company carried out in-depth adjustment of the management team (post change exceeds 1 / 3), focusing on the improvement of the organizational ability of the middle office and Taiwan: the main direction is ① in-depth integration of the value of foreign trade, production, research and marketing, human and property; ② Set up the middle and Taiwan product business department (to be assessed separately) to be responsible for the improvement of product strength of various categories. During the adjustment period in October, the company’s operation was not affected and showed Organizational Resilience.
2) focus on retail Digital Construction: enhance brand exposure, cross regional Wuxi Online Offline Communication Information Technology Co.Ltd(300959) diversion, empower store managers & shopping guides, and cultivate private traffic through “cloud + tube + platform”. Although the real estate cycle suppresses the growth rate of marginal orders, the household head brand can counter the interference of passenger flow through the full flow card.
Profit forecast and valuation
The company’s category integration + retail transformation + efficiency improvement casting long-term competitiveness is a high-quality consumption white horse we are optimistic about for a long time. We expect that the company will realize revenue of RMB 181.53/223.95/27.315 billion respectively from 21 to 23 years, with a year-on-year increase of 43.32% / 23.37% / 21.97%; The net profit attributable to the parent company was 1.703/2.121/2.603 billion yuan, with a year-on-year increase of 101.39% / 24.6% / 22.72%. The current market value corresponds to the PE of 21-23 years, which is 25.47x/20.44x/16.65x respectively, maintaining the “buy” rating.
Risk tip: channel construction fails to meet expectations, and real estate regulation exceeds expectations
