\u3000\u3 China Vanke Co.Ltd(000002) 572 Suofeiya Home Collection Co.Ltd(002572) )
Suofeiya Home Collection Co.Ltd(002572) : China’s customized home furnishing leader, the whole family’s strategy set sail again Suofeiya Home Collection Co.Ltd(002572) 2003 started with customized wardrobe, introduced Simi cabinet in 2014, acquired Huahe wooden door in 2017 for category expansion, and launched the mass market focused brand “milanna” in March 2021. In December 2021, the company upgraded its brand positioning to “wardrobe | whole family customization”. By the end of September 2021, Jiang ganjun and Ke Jiansheng, the founders of Suofeiya Home Collection Co.Ltd(002572) had a total direct shareholding of 39.91%. The company’s ownership structure was clear and stable, and the company had launched employee equity incentive and dealer shareholding plans for many times to continuously promote the sustainable development of the company. In terms of performance, from 2016 to 2020, the company’s operating revenue increased from 4.53 billion yuan to 8.353 billion yuan, with a CAGR of 16.53%; The net profit attributable to the parent company increased from 664 million yuan to 1.192 billion yuan, with a CAGR of 15.76%. The profitability of the company is leading in the industry, with a gross profit margin of 36.56% in 2020, which remains stable on the whole. After 2018, real estate sales declined and industry dividends gradually retreated. The company rebuilt its core competitiveness in an all-round way by expanding categories and channels, promoting the coordinated development of big home strategy, and fine management of dealers. The company expects to achieve an operating revenue of 10.023-10.441 billion yuan in 2021, with a year-on-year increase of 20% – 25%. The revenue has successfully exceeded the 10 billion mark and the performance has returned to a stable growth trend; In 2021, the company accrued special credit impairment loss of about 925 million yuan for Evergrande, with the proportion of provision exceeding 76%. It may be light in 2022.
The margin of the real estate policy has eased, and the space and concentration of the customized home industry still need to be further improved: the new construction area of houses in China reached 12.76% in 20172019. Affected by the epidemic, it is expected that the completion and delivery of this part of new houses will be delayed until 20212023, which is expected to continue to support the demand of the home industry. Since March 2022, the State Council and many ministries and commissions have made intensive statements to maintain stability, and the real estate policy is expected to be eased. According to our calculation, the scale of China’s customized home market (ex factory caliber) will reach 239.6 billion yuan in 2020, while the market share of leading enterprises will be less than 5% in 2020. The industry space is broad and the concentration still needs to be improved. With the advent of the era of customized large home, the integration of all categories has developed into the core of competition. The comprehensive strength of leading home enterprises, such as product brand, supply chain integration, channel operation and information system, is significantly ahead, which is expected to further occupy the market share of small and medium-sized enterprises.
New drivers of the company: the management team will be upgraded again, and the upgrading of the whole customized strategy will lead the retail reform: 1) in terms of management team, Suofeiya Home Collection Co.Ltd(002572) completed the change of management in September 2021, and the new senior management team led by Wang Bing will be younger and more professional. Yang Xin, former vice president of Oppein Home Group Inc(603833) joined Suofeiya Home Collection Co.Ltd(002572) as vice president of marketing, and launched four customized packages of 39800 yuan, which accurately meet the different needs of blank users, hardcover people, accommodation experts and fashion experts. 2) In terms of products, Suofeiya Home Collection Co.Ltd(002572) brand launched the “whole cabinet” for the first time, promoted the continuous improvement of customer unit value with the upgrading of the whole customization strategy, and is committed to providing multi category integrated solutions; Simi and Huahe focus on the transformation from light and high setting market to whole house customization; Milanna accelerated the expansion of offline stores and actively explored online channels. In the future, the increase in customer unit price of wardrobe mainly comes from the increase in the number of cabinets and the upgrading of product structure; The overall cabinet business is expected to return to the retail market, and the structure of bulk customers is continuously optimized; The marginal sales contribution of furniture accessories business is expected to be further improved with the in-depth promotion of the whole customization strategy. 3) In terms of channels, by strengthening active marketing and fine operation in the way of “city re cutting”, the company has radiated new opportunities in retail business. The whole decoration channel is also overweight layout, in-depth cooperation and empowerment with national high-quality decoration enterprises, and the whole decoration business may become a new growth point in the future. 4) In terms of digital production, the company’s seven major producing areas are reasonably arranged. The second 4.0 digital intelligence factory was officially put into operation in March 2022, and the intelligent manufacturing and flexible production capacity remains a global leader.
Investment suggestion: maintain the investment rating of buy-a Suofeiya Home Collection Co.Ltd(002572) continuously promote the strategy of “all channels, multi brands and all categories”, introduce outstanding talents in the industry, constantly optimize the management structure, refine the channel management and upgrade the whole customization strategy, lead the positive change of retail channels, and accelerate the expansion of new channels such as packaging. After the impairment of large accounts receivable is accrued in a high proportion, light equipment will enter the battle in 2022. We estimate that the operating revenue of Suofeiya Home Collection Co.Ltd(002572) 20212023 will be 10.139, 12.102 and 14.190 billion yuan, with a year-on-year increase of 21.39%, 19.36% and 17.25%; The net profit attributable to the parent company was RMB 125 million, RMB 1403 million and RMB 1.731 billion, with a year-on-year increase of – 89.51%, 102179% and 23.35%, corresponding to PE of 142.2x, 12.7x and 10.3x. The performance increased steadily, and the target price was RMB 31.51.
Risk warning: industry competition intensifies; The effectiveness of the reform did not meet expectations; The calculation is less than expected.
