Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) (300911)
Investment logic
After 20 years of intensive cultivation of integrated stoves, the company has sought new development through organizational reform in the new era: the company began to focus on integrated stoves in 2003. Compared with traditional cigarette stoves, integrated stoves have significant advantages and benefited from the high atmosphere of the industry. The company's performance has increased steadily. In 2020, it will achieve a total revenue of 720 million yuan and a net profit of 140 million yuan. From 2016 to 2020, the revenue and net profit CAGR will be 21.2% and 40.9% respectively. In the past 21 years, the management of the company has changed from old to new, carried out a series of organizational changes, attached importance to marketing reform, and the adjustment of organizational structure has injected new vitality into the development of the company.
High R & D investment, leading industries in technology upgrading and product innovation, rich product matrix: R & D investment has maintained a high level for many years, and the R & D expense rate in the first three quarters of 21 years was 4.0%, higher than that of comparable companies in the industry. The company took the lead in applying the side suction and lower discharge technology, leading the integrated stove industry from deep well annular suction to the side suction and lower discharge era, and realizing a qualitative leap in product performance. In addition, the company pioneered the fan down technology and launched the industry's first independent integrated cooking stove based on it. The intelligent cooking housekeeper S9 released in 2021 promoted the intelligent upgrading of the industry.
Make up for the shortcomings of the channel and improve the quality offline: offline distribution is the main sales mode of the company. 20h1 accounts for 63.6% of the total revenue. In the past, the number of dealers was leading, but the scale was small. Continue to optimize the dealer team, actively recruit big dealers and take multiple measures to improve the quality of dealers. Online, by adding a new retail platform and launching online special funds, we can promote the rapid development of online distribution and realize Wuxi Online Offline Communication Information Technology Co.Ltd(300959) mutual drainage.
The channel reform has achieved remarkable results, attached importance to marketing investment, and the performance growth rate in 21 years is significantly higher than that of comparable companies: the scale of the company's revenue and net profit is in the second echelon of the industry. In recent years, the company has strengthened marketing promotion, and the sales expense rate has continued to increase. Benefiting from the improvement of channels and marketing, the company's revenue and net profit in the first three quarters of 21 years increased by 68.6% and 62.8% year-on-year respectively, The growth rate was significantly higher than that of comparable companies.
Investment advice and valuation
It is estimated that the company's revenue from 2021 to 2023 will be RMB 1.16 billion, RMB 1.60 billion and RMB 2.11 billion respectively, with a year-on-year increase of 61.4%, 38.1% and 32.2%; The net profit was 230, 300 and 400 million yuan, with a year-on-year increase of 56.4%, 35.4% and 31.3%. The current stock price corresponds to pe39x, 29x and 22x. Considering the high prosperity of the integrated stove industry, the company's leading product power and the continuous empowerment of channel and organizational change, it is expected to fully enjoy the dividends of the rapid growth of the industry. According to the assumption that peg is about 1, the company is given a valuation of 35 times in 2022, the target price is 98.6 yuan, covered for the first time, and the company is given a "overweight" rating.
risk
The terminal consumption is weak, and the penetration rate is lower than expected; The entry of traditional kitchen electricity and household electricity faucets intensifies the risk of industry competition; Risk of rising raw material prices; Risk of lifting the ban on restricted shares.
