Beijing Roborock Technology Co.Ltd(688169) (688169)
Investment logic
In terms of going to sea, the European market with outstanding dividends has been deeply arranged and achieved remarkable results: technological innovation drives the scale growth of the sweeper industry, and Chinese brands have caught up with and surpassed overseas leaders in technology, which is expected to lead a new round of industry growth. The company has opened up overseas markets with cost-effective products and achieved remarkable results in its layout in Europe. The permeability of sweepers is highly deterministic. According to our calculation, the market penetration of the United States and Europe is expected to increase to about 24% and 10% respectively in 2025, corresponding to about 17% CAGR in 2020-2025. Europe has a good competition pattern and will be the main battlefield for Chinese sweepers to compete at sea in the future. We are optimistic about the company’s continuous performance growth under the first mover advantage in Europe.
In terms of products, relying on the advantages of algorithms, the company has built high core barriers and diversified layout to increase its performance: the company has strong R & D genes, has adhered to high R & D investment for many years to maintain technology leadership, and has achieved industry-level technological breakthroughs several times. The advanced technology is the core technical barrier of the company. The absence of self-cleaning in the early stage has led to a decline in market share, and the large volume of new self-cleaning G10 is expected to drive the recovery of the company’s market share. Diversified layout of floor washer and commercial cleaning Siasun Robot&Automation Co.Ltd(300024) . The market space of floor washing machine is broad, which is expected to become the second growth curve of the company’s performance.
ODM transformed its own brand, rapidly improved its profitability, and accelerated to make up for its marketing weaknesses: the company started as a OEM for Xiaomi, gradually completed the establishment of its own brand and the expansion of categories, and maintained rapid growth in revenue and profit. In 2020, the total revenue will be 4.53 billion yuan and the net profit will be 1.37 billion yuan. From 2016 to 2020, the revenue and net profit CAGR will be 123.0% and 173.4% respectively. High gross profit margin superimposed with low sales expense rate, the company’s net profit margin and roe are significantly higher than comparable companies. The supplement of marketing weakness will help to give full play to the company’s product advantages and drive revenue growth.
Investment proposal and valuation
It is estimated that the company’s revenue from 2021 to 2023 will be 5.84 billion yuan, 7.66 billion yuan and 9.78 billion yuan respectively, with a year-on-year increase of 29.0%, 31.0% and 27.7%. It is estimated that the net profit of the company from 2021 to 2023 will be RMB 1.56 billion, 2.03 billion and 2.56 billion, with a year-on-year increase of 14.0%, 30.3% and 25.9%. The current stock price corresponds to pe34x, 26x and 20x. Considering that the long-term penetration of sweepers has clear room to improve, and the company has profound technology accumulation, it is expected to continue to lead in the high-quality track driven by supply and demand, and fully benefit from the dividend of the rapid growth of the industry. 40 times valuation in 2022, target price of 1217.9 yuan, first coverage, and “buy” rating.
risk
Permeability improvement is less than expected; R & D promotes new products, and the product performance is lower than expected; The overseas market expansion is less than expected, and the shortage of shipping capacity affects the company’s overseas sales; Exchange rate fluctuation risk; The risk of lifting the ban on restricted shares; The risk of stock price changes caused by shareholders’ reduction.
