\u3000\u3 China Vanke Co.Ltd(000002) 572 Suofeiya Home Collection Co.Ltd(002572) )
Suofeiya Home Collection Co.Ltd(002572) as a front-line leader in the industry, it has significant advantages in channels, products and brands. At the same time, the company’s recent release of the whole strategy and sorting out the brand product matrix show the positive changes of the company. We are optimistic that Suofeiya Home Collection Co.Ltd(002572) will return to rapid growth through changes in products and channels.
Suofeiya Home Collection Co.Ltd(002572) product power and channel power are in the leading position in the industry Suofeiya Home Collection Co.Ltd(002572) as the first-line leader in the furniture industry, it has strong brand influence, and its product power and channel power are at the forefront of the industry. At present, the company has taken the lead in the industry in terms of the quality of pure sector, accounting for 9% of the total orders; In terms of cost, the proportion of direct material cost reflecting the process level is absolutely low in the industry. In terms of channels, wardrobe stores rank first and the total number of stores ranks second in the industry. The average delivery volume of stores is at the forefront of the industry. In addition, bulk and packaged channels are also developed smoothly. The layout of the country’s seven major production bases helps the company achieve low transportation cost and high distribution efficiency.
The whole strategy opens up market space. The integrated design and customization of furniture can fully meet the needs of consumers and show strong competitiveness. At the beginning of 2022, under the whole customization strategy, the company launched 39800 package, including customization, software and electrical appliances. The whole customization includes many SKUs, which requires the company to have strong channel and supply chain management and control capabilities. Suofeiya Home Collection Co.Ltd(002572) has significant advantages as the leader of customization. The whole customization will further improve the customer unit price of the company. In the long run, the big home strategy is expected to help the company become a “full category home brand” and open up long-term growth space.
Cabinet business is expected to achieve rapid growth. While the company released the whole package, it also launched the main brand cabinet to promote the growth of cabinet. We believe that the cabinet is expected to achieve accelerated development: 1) the main brand channel layout and brand effect are stronger, the internal category coordination will be smoother, and the whole product can also drive the sales of cabinet; 2) The company’s cabinet and wardrobe dealers have a high degree of overlap. After years of development, the dealers have been familiar with the cabinet business process and the introduction is more smooth; 3) Under the real estate credit risk, the overall slowdown of bulk business, the growth of cabinet retail industry has warmed up, and the willingness of dealers to participate has increased. The increase of cabinet scale is expected to increase the gross profit margin of cabinet to the industry average level.
Actively change the management system and stimulate the vitality of the marketing side. Since 2018, the company has carried out timely reform and optimization of the management system of dealers, with obvious results, promoting the growth of retail business in 2021h1. In 2021, the company further sorted out the brand matrix and determined to reposition the brand according to consumer groups rather than categories. Simi, Suofeiya Home Collection Co.Ltd(002572) , milanna were positioned at high-end, medium and high-end and young consumer groups respectively, with clearer positioning. All brands operate in a full range of categories, so their respective store space will be significantly improved in the future. In order to cooperate with the whole customization strategy, the company further optimized the marketing side, strengthened the assistance of the internal team to the dealers, and promoted the dealer team to strengthen the service ability. We believe that a series of changes and optimizations of the company will help the smooth advancement of the whole strategy and promote the sustainable growth of all brands.
Profit forecast and investment rating: the company promotes the whole strategy, increases the customer unit price, actively optimizes the channel end and improves the terminal operation capacity. We expect the company to achieve revenue of 10.252, 12.142 and 14.242 billion yuan from 2021 to 2023, and the net profit attributable to the parent company is 140, 1.421 and 1.762 billion yuan, with corresponding PE of 124.16, 12.20 and 9.84 respectively, maintaining the “recommended” rating of the company.
Risk tip: the recovery of real estate sales is less than expected, the price of raw materials fluctuates sharply, and the epidemic affects terminal demand.
