\u3000\u3 China Vanke Co.Ltd(000002) 003 Zhejiang Weixing Industrial Development Co.Ltd(002003) )
Key investment points:
China is a leader in zipper and button industry, and actively expand new categories. The company is mainly engaged in the R & D, manufacturing and sales of all kinds of medium and high-end clothing accessories. It is committed to providing customers with fast and intimate "one-stop" services, providing customers with "customized" integrated accessories solutions, actively promoting the "big accessories strategy". While focusing on the main categories such as buttons, zippers and metal products, the company expands new categories such as plastic products, signs, webbing and so on. The company has five major industrial bases outside China, and has formed an annual production capacity of more than 10 billion buttons and 650 million meters of zippers.
YKK is still in the lead, but it shows a slight decline. National enterprises are eager to catch up and have full stamina. Garment accessories are typical non-standard products, with low single piece value and technical content and low entry threshold. At the same time, accessory manufacturing enterprises mainly rely on the distribution of garment enterprise clusters, and the industry concentration is low. YKK is the leader in the global zipper industry, with annual net sales of more than 14 billion yuan. Its sales in China are about 4-6 billion yuan, accounting for 20% - 30% of China's medium and high-end zipper market. The total share of national enterprises Zhejiang Weixing Industrial Development Co.Ltd(002003) and Fujian Sbs Zipper Scienceand Technology Co.Ltd(002098) is about 14%. Affected by the overseas epidemic, some orders returned. At the same time, with the improvement of the brand's requirements for quick response, national enterprises rely on their advantages of small order quick response and technological upgrading to better meet the personalized needs of customers, form differentiated competition with YKK and accelerate the narrowing of the gap with YKK.
Pay close attention to the two main lines of "cost reduction and efficiency increase" and "input-output" to improve the comprehensive competitiveness of the company. 1) Product strength: strengthen new product R & D and category expansion to enhance product competitiveness. The company vigorously promotes technological innovation and upgrading, constantly builds the competitive advantage of the company's core products, improves the technical content of products, and creates technical barriers. By the end of 2020, the company has 667 patents at home and abroad, accounting for 4.14% of R & D expenses; 2) Intelligent manufacturing power: take input-output as the main line, improve quality and efficiency, and highlight the advantages of intelligent manufacturing. Continue to focus on the construction of intelligent equipment and management data, accelerate the construction of smart factory, improve the automation level, speed up the production response speed, and promote the improvement of per capita output. From 2016 to 2020, the per capita output of the company increased from 287900 / person to 320600 / person. It is expected that with the promotion of intelligence, there is still a large room for improvement of per capita output in the future; 3) Marketing power: improve the global marketing network and comprehensively improve the marketing ability. In recent years, the company has accelerated the layout of global marketing network and built an international marketing and service system radiating more than 50 countries and regions around the world. At the same time, the company began to deploy production capacity overseas in 2016, mainly to improve its ability to catch orders; 4) Service ability: focus on high-quality key customers and create service advantages. Focusing on high-quality major customers, the company is committed to solving the pain points and difficulties of high-quality customers' needs, realizing the rapid expansion of high-quality customers, and providing one-stop service throughout the process to meet customers' personalized needs and improve customer satisfaction; 5) Talent: continue to promote team building and build a high-quality team. The company continues to introduce excellent talents, improve the combat effectiveness of the team, and continues to launch equity incentive plan, benefiting a number of key employees and stimulating employees' initiative.
Profit forecast and investment suggestions: Zhejiang Weixing Industrial Development Co.Ltd(002003) as the leader of zippers and buttons in China, intelligent manufacturing and technological reform have achieved remarkable results in recent years, continuously empowering the enhancement of the company's brand strength, continuously expanding high-quality customers, increasing the share of existing customers, driving the growth of the company's orders, and there is a broad growth space. It is estimated that the operating revenue of the company from 2021 to 2023 will be RMB 3.271/38.93/4.423 billion respectively, the net profit attributable to the parent company will be RMB 453560/623 million respectively, and the EPS will be RMB 0.57/0.70/0.78 respectively. By comprehensively comparing the valuation and growth of the company and comparable companies, we give the company 20-23 times of PE valuation in 2022, and the corresponding reasonable price range is RMB 14.00-16.10. The company will be given the "recommended" rating for the first time.
Risk tip: the epidemic repeatedly affects the terminal demand, the promotion of intelligent manufacturing is less than expected, and the cost control is less than expected.
