Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) (300911)
Integrated stove industry leader.
Sun Weiyong and Chen Yuehua, the founders of the company, have been deeply engaged in the kitchen electric industry for more than 20 years, with both technical and sales background. Since 1990, they have successively engaged in the R & D, production (including OEM and licensing) and sales of traditional kitchen electric appliances such as tabletop stove parts, tabletop stove machine and embedded stove machine, as well as the technical evolution and Deep understanding of channel operation and brand maintenance. In 2003, Yitian Co., Ltd., the predecessor of the company, was founded, focusing on the integrated stove industry. In 2007 and 2016, it took the lead in breaking through the technology of side suction and lower exhaust of integrated stove and lower fan, leading the innovation of the industry. In 2020, the company achieved a revenue of 720 million yuan and a net profit attributable to the parent company of 90 million yuan, ranking among the top three in the industry. Among them, the revenue of integrated stove products accounted for 89.8%, which was the largest contribution to the company's performance.
Build a growth base based on technological innovation and quality
In terms of R & D, the company has gradually created a set of practical growth flywheels, that is, through continuously increasing R & D investment, promote the core technology innovation at the bottom of the integrated stove (such as side suction and lower exhaust, fan lower placement, etc.), and enable the company to design products with differentiated capabilities (such as S7 dishwasher integrated stove / S8 steaming and baking independent integrated stove / S9 ice steaming integrated stove), Ensure the company to complete the active innovation and differentiated layout of products, and give the company high gross profit space to pry the incremental market (such as Ka channel), so as to drive the company's performance growth, and finally feed back to the research and development start, support continuous R & D investment, and form a positive feedback closed loop.
In terms of manufacturing, as a large kitchen power, integrated stove has typical characteristics of durable goods. Product quality has an important impact on consumers' purchase decision and word-of-mouth communication after purchase and use. Since its inception, the company has always attached importance to product technological innovation and quality control. From 2017 to 2020h1, the plate consumption of a single integrated stove was 69.5/72.6/73.5/75.1kg/set, and the production cost of a single integrated stove was 2070 / 2411 / 2449 / 2603 yuan / set, both of which showed an increasing trend year by year, taking a leading position in the same industry. In 2013, 2016 and 2018, the company won the quality awards of Shengzhou City, Shaoxing City and Zhejiang Province respectively. It is the only enterprise among more than 100 similar enterprises in Zhejiang Province, which fully demonstrates the company's strict quality control ability.
Channel expansion and marketing breakthrough to accelerate the release of efficiency
At the end of 2020, the company launched a new round of reform to promote the comprehensive upgrading of "products, brands, channels, management and talents". In 2021, the reform of the company was gradually carried out. Mr. Pang Tingjie, former retail sales director of Hangzhou Robam Appliances Co.Ltd(002508) and Mr. Liu Wei, former e-commerce Minister of Marssenger Kitchenware Co.Ltd(300894) were successively introduced to enhance the operation capacity of offline and online channels. At present, the company has gradually implemented dealer optimization (21h1 optimization of nearly 200), store upgrading (800 + terminal transformation), big business recruitment (5 million + annual sales) Wuxi Online Offline Communication Information Technology Co.Ltd(300959) "the same money and commission", Ka and project channel development (the special machine SKU is gradually supplemented) and other multidimensional measures continue to release the operation efficiency and open the incremental space. From 2021q1 to Q3, the company's performance recorded rapid growth, and the net profit attributable to the parent company increased by 421.8% / 23.6% / 61.5% respectively year-on-year, and the reform results were gradually realized.
Investment advice
The company has advanced technology, solid product strength and profound industry accumulation. In 2021, the company is determined to forge ahead. Through multi-dimensional reforms such as products, brands, channels, management and talents, the company continues to enhance the organizational operation ability and continuously release the organizational operation efficiency. The alpha attribute is gradually highlighted, superimposing the strong beta attribute of low penetration and high growth of the integrated stove industry, It is expected that the company will fully benefit and maintain high growth. It is estimated that from 2021 to 2023, the company will achieve operating revenue of RMB 1.16 billion, RMB 1.57 billion and RMB 2.04 billion respectively, with growth rates of 62.3%, 34.9% and 30.0% respectively, and net profit attributable to parent company of RMB 230 million, RMB 310 million and RMB 430 million, with growth rates of 56.6%, 38.5% and 38.1% respectively, corresponding to EPS of RMB 2.1, 2.9 and 4.0 yuan / share respectively. The current stock price corresponds to 39.4x, 28.5x and 20.6x PE respectively from 2021 to 2023. For the first time, it will be rated as "overweight".
Risk statement
Risk of intensified market competition; Macroeconomic downside risk exceeding expectations; The epidemic situation repeatedly affects the risk of offline market development; New product R & D is less than expected risk, etc.
