Jade Bird Fire Co.Ltd(002960) (002960)
Core view: Jade Bird Fire Co.Ltd(002960) is the leading target of undervalued fire alarm sub circuit. The core focus is ① product expansion: the company actively carries out the layout of new products and new fields and enters a new round of business scale expansion period; ② Profit improvement: considering internal and external factors, the company is expected to usher in an upward turning point in profit in 2022; ③ Industrial upgrading: with the upgrading of industrial demand, the field of energy storage and fire protection will become a potential growth point. On the whole, the company has large growth space and high performance certainty. It is expected that the valuation in 2023 will be only 17x, giving a "Buy-A" rating.
The growth ceiling of the fire protection products industry is high, showing a market pattern of "large industry, small company": ① from the perspective of industry growth, the fire protection industry is a track of sustainable growth. On the one hand, it is accompanied by national economic growth and social wealth accumulation, and the investment in safety and security will continue to increase; On the other hand, similar to network security, security and other security industries, the "disaster prevention, mitigation and relief" function of fire products is difficult to directly create economic value. In the past history, there was insufficient early investment. Therefore, the new addition is intertwined with the stock market, and the growth ceiling of the industry is high. According to Zhiyan consulting, from 2014 to 2019, the overall scale of the fire industry increased from 193 billion yuan to 355.9 billion yuan, with a CAGR of 13.02%, of which the market scale of fire products increased from 43 billion yuan to 103.2 billion yuan, with a CAGR of 18.76%. ② From the perspective of industry participants, Jade Bird Fire Co.Ltd(002960) as a leading company, the revenue scale exceeded 2 billion for the first time in 2019, and the revenue scale of the second echelon companies in the industry was between 100 million and 1.5 billion, which was rare. According to the investigation report on the development status of China's fire industry, as of 2016, the number of fire-fighting enterprises in China exceeded 28000, including about 5700 fire-fighting product enterprises and about 1000 main automatic alarm systems, mainly small companies.
The company actively expands its products, covering about 60 billion market space, and has great potential to increase its market share. Jade Bird Fire Co.Ltd(002960) it is mainly engaged in various fire safety systems. Its core business is the general fire alarm system, accounting for 76% of the revenue in 2020. At the same time, it actively arranges the emergency evacuation business, enters the field of industrial fire protection and extends to the field of intelligent fire protection. The company is committed to the whole station solution of fire alarm and evolves in the direction of the whole chain of early warning, escape and fire fighting. According to the data of intelligent research consulting and Huajing Industrial Research Institute, the company has a market space of about 60 billion, including about 30 billion for general fire fighting, 20 billion for emergency evacuation and 10 billion for industrial field. If fire extinguishing products are added, the market space will cover more than 80 billion. In 2020, the company's revenue will be 2.53 billion yuan, with a comprehensive market share of about 4%. Looking only at the general sector business, the market share will be about 7%. The industry space of the company will continue to expand, and the market share has great potential to increase.
Industry characteristics determine the competitive factors of enterprises, Jade Bird Fire Co.Ltd(002960) has significant competitive advantages: ① the downstream is scattered, and the scale expansion depends on brands and channels: on the one hand, Bluebird's brand value continues to highlight, and has accumulated rich know how for 20 years. There are more than 100 representative projects. Olympic venues and large international airport projects are the endorsement of the company's product strength, Won the top of the top 500 preferred suppliers of real estate development for two consecutive years; On the other hand, the company's unique monopoly distribution model is superior to peer companies in expanding sales scale, improving channel control and reducing sales expenses. ② Under the quality oriented market competition, differentiation has become an important means to open the echelon gap: benefiting from the tightening of policies, industrial upgrading and pattern optimization, we believe that the industry as a whole has evolved to the middle and later stage of the growth period, from the price oriented extensive competition to the product oriented quality competition. Bluebird has developed its own "Crested Ibis" chip to prevent know how spillover, realize differentiation through technical iteration, actively embrace the trend of integration of fire, safety and materials, and jump out of the trap of low price competition.
In the future, there are three catalytic factors: ① in the short term, the profitability is improved: in terms of gross profit margin, considering the optimization of competition pattern and product structure, the company's gross profit margin is expected to stabilize at about 40%; In terms of net interest rate, Initial investment in new business layout (products, teams and channels) have been basically completed. In the future, refined internal control will improve per capita energy efficiency. It is expected that the sales expense rate will show a downward trend. The amortization of equity incentive expenses has been completed by about 67%, and the pressure on the management expense rate is relieved, which is expected to be reduced by about 1PCT. Comprehensively, it is expected that the company's net interest rate is expected to reach 13.7% in 2022, an increase of more than 1PCT. ② in the medium term, the income elasticity will increase, Accelerated increase in market share: the structural growth momentum in the general field is sufficient. At the same time, the company arranges emergency evacuation in advance and actively enters the field of industrial fire fighting and household fire fighting. Under the policy east wind, it is expected to bring greater income elasticity to the company. ③ In the long run, industrial demand upgrading: the development of energy storage industry and the increase of electric vehicle ownership are accompanied by fire hazards, so as to promote the overweight of fire management policies and industrial upgrading.
Investment suggestion: we estimate that the operating revenue of the company from 2021 to 2023 will be RMB 3.626 billion, RMB 4.828 billion and RMB 6.377 billion respectively, with a year-on-year growth rate of 43.6%, 33.2% and 32.1% respectively, and the net profit attributable to the parent company will be RMB 453 million, RMB 662 million and RMB 935 million respectively, with a year-on-year growth rate of 5.4%, 45.9% and 41.4% respectively. EPS is 1.30, 1.90 and 2.69 yuan respectively, and the corresponding PE is 35, 24 and 17 times respectively. Maintain the "Buy-A" rating, and the six-month target price is 57.47 yuan.
Risk warning: market competition intensifies; The expansion of emergency evacuation market is less than expected; Business expansion in the industrial field is less than expected; The collection is less than expected, resulting in an increase in bad debts; Poor management of major shareholders hinders listed companies
