\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 828 Red Star Macalline Group Corporation Ltd(601828) )
Core view
Red Star Macalline Group Corporation Ltd(601828) as the absolute leader of China's home chain stores, it is the flow king in the field of home consumption. Under the background that the stock transformation drives the steady growth of the industry and the category pays attention to the decision-making to determine the offline advantages, it has strong industrial bargaining power and market share to improve. The company builds barriers with high-quality self operated network; Entrust management to light assets, optimize operation structure and channel expansion efficiency; And the second curve of high plasticization of home decoration and the transformation of new retail together with ALI, so as to strengthen the potential energy of flywheel effect and build an ecological platform for home consumption; On the whole, its industry competitiveness and performance growth are highly uncertain.
Company profile: Home circulation is the absolute leader, home decoration builds the second curve, and join hands with Ali to lead the new retail transformation. 1) At the end of the 21st century, there were 95 self operated and 278 entrusted shopping malls, accounting for 7.1% and 17.1% of the market share of the national home industry and chain home shopping malls in terms of retail sales in 20 years; Relying on the empowerment of the main industry, a high growth home decoration sideline industry was formed (the revenue increased by 115% and 215% in 2020 and 21h1). 2) The company's equity is concentrated, the founders account for the leading proportion, and Ali, the second largest shareholder, continues to subscribe. In addition, the "employee stock ownership + stock option + increase of directors, supervisors and senior executives" constitute a rich incentive and benefit sharing mechanism and highlight the considerable confidence of the management.
Industry structure: under the new situation, the demand only increases but not decreases, and the leading share of the whole link is strengthened. 1) Based on the characteristics of low frequency, decision-making and service dependence of home and the lack of bargaining structure of upstream scale (only 5.5% of the retail sales of home manufacturing enterprises above the quota in 19 years), the circulation link has a high voice and profit space in the home industry chain. 2) The choice of home channel shows the trend of traffic fragmentation and customer pre acquisition, but the category characteristics determine that the unique offline experience, local service and scale brand advantages of large chain stores are indispensable. They can capture incremental opportunities and win a higher share with integrated upgrading. 3) Driven by the stock market with a slightly smaller proportion but faster growth, the scale of home is expected to grow steadily, and the epidemic home will give birth to additional demand.
Core highlights: positive circulation of brand scale, light asset integration and reshaping the moat. 1) From the perspective of limited points and capital threshold, the company has deep high-quality offline network barriers, forming a flywheel growth structure that consolidates the brand and scale advantages based on the settled merchants and customer satisfaction. 2) The newly opened shopping malls mainly focus on the export management and burden free entrusted management mode (the net number of entrusted stores in 18-20 years is more than three times that of self operated stores), and efficiently penetrate the sinking market with more growth potential with multi gradient brands. The channel expansion mode is optimized and the efficiency is improved. 3) The advantages of home decoration new business front-end customer acquisition + terminal design + local chain are significant, breaking through the industry bottleneck and is expected to become a new leader. At the same time, the main home industry will be upgraded to a full link solution and two-way diversion; Then, with digital upgrading, optimizing experience in the same city station and condensing online traffic, a global business system integrating industry and channel is formed. 4) Through divestiture of assets and PE exit, strengthen financial strength, continue to repay liabilities, take the initiative to reduce leverage (the debt ratio with interest decreased from 32% in 2020 to 30% in 21q3), and enter a benign operation mode of focusing on main business, emphasizing operation and neglecting assets.
Profit forecast and investment suggestions
We predict that the company's EPS in 21-23 years will be 0.71/0.83/0.95 yuan respectively; Using the comparable company valuation method, the company is given a price earnings ratio of 15 times in 22 years. After excluding the non recurring profits and losses such as net investment income, the adjusted EPS is 0.55/0.71/0.84 yuan, corresponding to the 22-year target price of 10.71 yuan. It is given a "buy" rating for the first time.
Risk tips
Cyclical fluctuation risk of real estate; Fluctuation risk of fair value of investment real estate; The progress of deleveraging is less than the expected risk; The self operated rent raising or entrusted management development is less than the expected risk; The cost control of home decoration business is less than the expected risk.
