Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
Key investment points
Core logic: Software + customization integration, moving from wholesale to retail. At present, domestic sales are the main composition of profits and the main driver of growth. Domestic sales (revenue accounts for 60% and profit accounts for about 90%) and export sales (revenue accounts for 37% and profit accounts for about 10%). We estimate that 20q3-21q3 Jason Furniture (Hangzhou) Co.Ltd(603816) endogenous domestic sales have achieved a rapid growth of more than 40% for five consecutive quarters, except for the industry β In addition to the growth of the company, it is more important that a number of internal management reform measures of the company have entered the effective period:
(1) Conversion rate: explain in detail the success of the regional retail operation reform. In June 18, Gu family carried out a major organizational structure reform of the channel system, fully decentralized the power, resources and assessment indicators, and shared the dealer operation functions: such as helping dealers locate and open stores, encouraging dealers to sell goods, accurate marketing, store point-to-point training, promoting the store informatization rate, pilot center warehouse service allocation, etc Redistribution of value chain and improvement of product cost performance.
(2) Customer unit price: the package sales will increase the customer unit value, and will mainly promote the integrated store in the future. The customer unit value will increase: about 10000 sofas, about 10000 beds & mattresses, and the customer restaurant will be equipped (coffee table, dining chair, etc.) is about 5000, and the customer unit value of the software part can reach 25000. At present, the company’s customized home has been gradually integrated into the product system, with a customer unit value of about 20000-30000, and the total customer unit value of software + customization can reach 45000-50000. The linkage rate continues to increase: the matching rate of family sofa, bedroom products and dining hall continues to increase. The proportion of comprehensive stores and large stores increases: as of 21q3, the company’s large stores + comprehensive stores Accounting for nearly 35%, it was 20% at the end of the 20th century. The proportion of integrated stores continued to rise, and the 1:1 matching of beds, functions, customized high potential categories and traditional leisure sofas was comprehensively promoted. Sinking the market: at the same time, Tianxi school with a sinking price of 20-30% will be launched to broaden the cost-effective consumer group
(3) Customer flow: pay attention to the investment in product promotion and seize the minds of consumers. Family care diversified marketing strategies to improve brand exposure and cultivate the minds of consumers. Four rounds of large-scale promotion activities are planned every year, of which 816 comprehensive family care day is the most watched, and “816 national family care day” in 2021 Sales reached 4.056 billion, with a year-on-year growth rate of 52.2%, with a high base and long growth. Offline channels maintain rapid expansion: according to the series caliber, we estimate that the number of independent brand stores of the company has been close to 8000. About 900 stores were opened in the first three quarters of this year, and 800-1000 stores will be opened in the next 2-3 years. The pull on the growth of domestic sales is expected to be 10-15% per year.
The same store growth is driven by the simultaneous rise of conversion rate + customer unit price + customer flow: in 2021h1, we calculated that the revenue of Jason Furniture (Hangzhou) Co.Ltd(603816) single store increased by 20-25% according to the caliber of series stores, which is reflected in the increase of Ping’an efficiency.
Category integration, supply chain & informatization, manufacturing efficiency improvement
In October of 21, the company made a significant adjustment to the management team (more than 1 / 3), and established the middle and Taiwan Products Division (assessed separately) to be responsible for the improvement of the product power of each category. In the future, the three high potential categories will continue to have a high growth trend.
(1) Product matrix: comprehensive layout, focusing on three high potential categories. In the past 20 years, the revenue of functional sofa, bed and customization reached 1.44 billion, 2.338 billion and 456 million respectively, growing rapidly, accounting for 1 / 3 of the total revenue.
(2) Customized home furnishings have accumulated a lot and entered the large-scale stage. Software home furnishings + customized home furnishings are two high-quality tracks for domestic home furnishings, and gujia Jianzhi has a market of more than 400 billion yuan. Gujia began to make customization in 16 years, increasing product R & D, improving service level, building production base and optimizing investment attraction system. It has entered the effective period, accelerated the opening of stores in 21 years, and is expected to exceed 1000 stores by the end of 22 years.
(3) Supply chain efficiency improvement: build a smart supply chain and the whole process of informatization. The company’s labor cost has decreased year by year from 15.56% in 16 years to 14.07% in 20 years.
Stone from another mountain: the growth model of FuPan beauty
Midea has realized the iterative upgrading of the supply chain at the channel end and improved the operation efficiency efficiently.
Innovation of ande logistics supply chain: ande Unicom is also responsible for the logistics business of Direct stores and the logistics distribution of dealers at all levels, so as to achieve the goal of inventory sharing and actively promote unified warehouse and distribution. In 2015, the “one inventory” strategy of ande Zhilian was implemented nationwide, with a significant decrease in the number of warehouses and a shortened order delivery cycle.
“T + 3” operation mode optimizes logistics cost and improves supply chain efficiency: it is implemented in its subsidiary “Little Swan”
“T + 3” mode, driven by this mode, the performance of Little Swan continues to improve, its inventory area is greatly reduced, and the whole cycle of “goods preparation, production and distribution” takes only 2 weeks.
Profit forecast and valuation
Gu family actively promotes the integration of software + customization, and the channel system moves from wholesale to retail. It is the leader of high-quality consumer goods with a compound growth rate of 25 +% in the next three years. We expect that the company will realize revenue of 18.06/22.24/27.07 billion yuan respectively in 21-23 years, with a year-on-year increase of 42.59% / 23.12% / 21.74%; The net profit attributable to the parent company was RMB 1.703/2.121/2.602 billion, with a year-on-year increase of 101.43% / 24.55% / 22.69%. The current market value corresponding to PE in 21-23 years is 28.55x/22.92x/18.68x respectively, maintaining the “buy” rating. Calculation of target market value: the company’s domestic and foreign sales account for 60% / 40% in 20 years. Assuming that the domestic / export business accounts for 65% / 35% in 22 years, and the domestic net interest rate / export net interest rate is about 14% / 3% respectively, the corresponding domestic sales profit is about 1.93 billion and export profit is about 170 million in 22 years. According to the PE valuation of domestic 30x and export 15x, the corresponding target market value is 60.45 billion and the target price is 95.53 yuan, More than 25% of the current price.
Risk tip: channel construction fails to meet expectations, real estate regulation exceeds expectations, and industry competition intensifies
