\u3000\u Guangzhou Improve Medical Instruments Co.Ltd(300030) Bingshan Refrigeration & Heat Transfer Technologies Co.Ltd(000530) 0005)
The equity change of outdoor products leader has been completed, and it is planned to cut into the chip track. Founded in 1999, the company is a leader in China’s outdoor products industry. Its products cover outdoor clothing, shoes and equipment. It ranks first in the market share of China’s outdoor industry and was listed on A-Shares in 2009. Starting from 2019, the original actual controller, founder Sheng Faqiang and Wang Jing transferred 7.8% / 5.85% / 5% shares to Tongyu Fund (Tongyu Zhonghe acting in concert) / Tongyu Zhonghe / Baiyishun (voting rights entrusted to Tongyu Zhonghe) in December 2019 / January 2021 / September 2021 respectively. So far, Tongyu fund and Tongyu Zhonghe hold 18.65% of the voting rights of the company. The new actual controller Li Ming has rich research and performance background in the semiconductor field, In September 2021, it launched the acquisition plan of Beijing core energy and plans to enter the chip field.
The diversified business has been stripped off and returned to the main outdoor business. 1) Ca6-2015: diversified income (increased by 28.6%). After listing in 2009, the company maintained rapid growth. In 2013, it opened a diversified layout by investing in the acquisition of companies such as Asiatravel and lvye.com and establishing a sports industry M & A fund, forming three main industries: outdoor + tourism + sports. 2) 20152018 (3-year revenue cagr-19.43%): growth was blocked and loss making businesses were stripped off. After 2014, the growth rate of the outdoor products industry slowed down and the competition was fierce. The outdoor business declined significantly, and the Tourism & sports business continued to lose money or made a small contribution to the revenue. In 2017, the company began to peel off the loss making business and return to the main outdoor business. 3) 2019: profitability improved and performance rebounded significantly. The effect of focusing on the main business showed that the gross profit margin increased significantly, the risk of asset impairment decreased significantly, the profitability rebounded, the income decreased by 24.12%, and the net profit attributable to the parent increased by 162.16%. 4) 2020: epidemic impact, performance decline. Due to the impact of the epidemic, the company accrued large asset impairment losses, and the revenue / net profit attributable to the parent decreased by 39.64% and 343.11% respectively. 5) 2021: industry recovery and performance recovery. As the epidemic eased, the company’s gross profit margin increased and the impairment loss decreased, driving the recovery of performance. Q1-q3 revenue in 2021 was + 41.70% / compared with – 33.28% in 2019 and net profit attributable to parent company was + 116.29% / compared with – 70.22% in 2019.
Outdoor business recovered in 2021. The company’s main outdoor brands include Toread Holdings Group Co.Ltd(300005) , discoveryexpdition, toreadkids and toread 10. 2021 H1 Toread Holdings Group Co.Ltd(300005) / de / Kids / toread X’s revenue increased by 33.29% / 56.51% / 54.31% / no comparable data and – 33.02% / – 13.13% / + 24.1% / no comparable data compared with 2019, accounting for 79.2% / 12.5% / 7.0% / 1.3% respectively. Children’s clothing brands have achieved rapid growth compared with 2019, and other brands have not yet recovered to the pre epidemic level. The company adopts Wuxi Online Offline Communication Information Technology Co.Ltd(300959) Omni channel operation. The revenue of H1 online / offline / other channels in 2021 is the same as + 20.95% / + 59.57% / – 9.01% respectively, accounting for 29.0% / 63.6% / 7.4% respectively. By H1 of 2021, there were 205 / 742 offline channel direct / franchise (including affiliated) stores respectively, with a net opening of + 7 / – 59 stores compared with the end of the previous period. The revenue growth was mainly due to the contribution of store efficiency growth.
Acquire Beijing core energy, step into the chip field and provide a new performance growth pole. The company started the acquisition of 60% equity of Beijing Xinneng on September 2021. On February 2022, the industrial and commercial change registration and relevant delivery procedures have been completed, and the acquisition is progressing smoothly. In the current context, limited international chip production capacity, strong downstream demand, geopolitical factors and numerous national incentive policies provide better opportunities for domestic alternative enterprises. Miniled, the main product of Beijing core energy, has a promising prospect as a new generation of LED technology. With the decline of miniled cost and mass production, it will gradually become the mainstream of LED industry. The company expects the global market scale of miniled to reach US $2.32 billion / cagr147.5 billion in 202488%。 As the first company in China to have direct display + backlight miniled active display driver chip products at the same time, Beijing Xinneng is expected to benefit from favorable policies and industry growth and provide Toread Holdings Group Co.Ltd(300005) with a new performance growth pole. The revenue / net profit attributable to the parent company of Beijing core energy in 2020 is RMB 2.0932 / – 135662 million respectively, and that of q1-q3 in 2021 is RMB 2.038 / – 9.9549 million respectively. It is committed that the main business income in 2022 will not be less than RMB 70.3 million, and the net profit before deducting non interest and tax in 2023 and 2024 will not be less than RMB 85.97 million and 172 million respectively.
Profit forecast and investment rating: the outdoor business is restored. The company predicts that the net profit attributable to the parent company will be 50-62 million yuan in 2021. If the acquisition is successful and the chip business is expanded, it is expected to provide a new driving force for performance growth in the future. We expect that the net profit attributable to the parent company from 2021 to 2023 will increase by 120.5% / 34.3% / 94.4% respectively, and the EPS will be 0.06/0.09/0.17 yuan / share, corresponding to pe118.5% 5x / 88.2x / 45.4x, with high valuation and “neutral” rating for the first coverage.
Risk tip: the epidemic has repeatedly affected consumption, and the acquisition and development of chip business are not as expected.
