\u3000\u300 China Vanke Co.Ltd(000002) 6 Fiyta Precision Technology Co.Ltd(000026) )
The leading brands of clocks and watches are leading, and their profitability has been steadily improved Fiyta Precision Technology Co.Ltd(000026) 1987, founded in Shenzhen, is one of the investment enterprises under AVIC international holding company. Focusing on the watch industry with precision manufacturing technology, the company has formed two core businesses: R & D, design, manufacturing, sales, service and famous watch retail of its own brand watches. At present, it has its own brands ” Fiyta Precision Technology Co.Ltd(000026) ,” weilushi “,” Muyang timepiece “and authorized brands” Jeep “and” Beijing “. From 2016 to 2021, the compound growth rates of revenue and net profit were 12% and 29% respectively. In 2021, the company realized an operating revenue of 5.244 billion yuan, a year-on-year increase of 23.57%, and a net profit attributable to the parent company of 389 million yuan, a year-on-year increase of 31.87%. Steadily improve profitability and optimize operation efficiency. In 2021, the weighted roe reached 13.39%, a year-on-year increase of 2.61pct, and the inventory turnover rate was 1.57 times, a year-on-year increase of 0.22 times.
Fiyta Precision Technology Co.Ltd(000026) the expansion of market share in the watch industry and the increasing trend of imports of high-end watches are conducive to the development of the company’s famous watch business. According to the data of iimediaresearch, the scale of China’s watch industry grew at a compound growth rate of 21.5% from 2018 to 2021, reaching 229.33 billion yuan in 2021, a year-on-year increase of 10.9%, and the market scale is expected to reach 281.5 billion yuan by 2023, corresponding to a compound growth rate of 10.7% from 2021 to 2023. Based on the operating income of industrial enterprises in the watch industry above Designated Size, the market share of the company increased from 8.5% in 2017 to 17.9% in 2021, and the market share expanded rapidly. In recent years, driven by the return of overseas high-end watch consumption, the average price of Chinese imported watches has increased significantly. Although China’s share of Swiss watch exports has fallen recently, we believe that in the medium and long term, the upgrading of Chinese consumption and the return of overseas high-end consumption are still the general trend, supporting the long-term development of the company’s famous watch business.
Steady development, integration of quality and efficiency, and consolidate the endogenous development power. Unlike most optional consumer goods, which mainly rely on the growth path of channel expansion, the growth of the company in recent years is mainly driven by the improvement of operation efficiency brought by product structure optimization and channel refined operation management. 1) Under the background of high base in 2020, the famous watch business still achieved a good growth of 30.3%, benefiting from the increase in the proportion of high-end watches. In 2021, the proportion of medium and high-end channels exceeded 55%, the average single store output of old stores increased by 27.93% year-on-year, and the average customer unit price increased by 25.44% year-on-year; 2) The business of private brand watches has maintained stable development. In 2021, the operating revenue was 1.012 billion yuan, with a year-on-year increase of 4.4%. The average selling price of private brand watches has risen steadily in recent years, and the gross profit margin has remained high. 3) The precision technology business is still in the cultivation period. In the past 21 years, based on the deep cultivation of optical communication and laser, we have orderly promoted the expansion of new markets and new customers such as aerospace and medical devices, and some projects have entered the stage of batch cooperation.
Profit forecast and investment rating: Fiyta Precision Technology Co.Ltd(000026) as a leader in China’s watch industry, its own brand has developed steadily. In recent years, it has actively grasped the development opportunities of famous watch market, accelerated channel layout and continuously increased market share. Relying on the strength of precision technology, the company launched smart watches, which is also expected to add new revenue growth points. The reform of state-owned enterprises is expected to stimulate the vitality of enterprises and improve operational efficiency. It is estimated that the operating revenue from 2022 to 2024 will be 6.097 billion yuan, 6.875 billion yuan and 7.879 billion yuan respectively, with a year-on-year increase of 16.3%, 12.8% and 14.6% respectively. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 449 million yuan, 515 million yuan and 587 million yuan respectively, with a year-on-year increase of 15.7%, 14.8% and 13.9% respectively. At present, the (2022 / 3 / 22) share price corresponds to 9x PE in 2022, with obvious valuation advantages. It is rated as “overweight” for the first time.
Risk factors: there is a risk of a large-scale outbreak of the epidemic in China, and the high-end consumption is less than expected.
