\u3000\u3 Shengda Resources Co.Ltd(000603) 833 Oppein Home Group Inc(603833) )
Re innovate the channel mode and firmly control the brand traffic entrance and marketing initiative
Mode: according to our understanding, the company will pilot in about 10 cities this year and select representative first, second and third tier cities, such as Chengdu, Shanghai, Shenzhen, Nanjing, etc. The area of the big home exhibition center will be more than 1000 square meters, and the location will be separated from the traditional store system. It will operate as an independent store / Street store / shopping center. It integrates home decoration, kitchen clothes, wooden bathroom and supporting products to provide consumers with a one-stop solution for big home with European style as the entrance.
Significance of promoting the new model: the company took this step to firmly grasp the brand traffic entrance and the dominant power of the design scheme, so that consumers can think of all aspects of home decoration when they think of European School in the future. At this stage, the whole decoration home business is advancing very fast, but the traffic entrance is often dominated by the home decoration company, and most functions such as reaching consumers and design schemes are connected by the whole decoration company.
Breakthrough in comprehensive ability, the joint venture model reduces the operation risk of dealers, and the model can be copied quickly after running smoothly
Build core competence and have the basis for implementation: Oppein Home Group Inc(603833) 16-17 years ago, the company piloted large household Qianping stores in some regions of Northeast China, but the promotion was not smooth because the company had not realized the opening of CAXA system to all categories at that time and did not have the ability to provide integrated sales. After several years of strong investment and polishing, europay has now accumulated maturity in informatization, product power, systematic sales scheme, supply chain and other aspects, and has the foundation to promote the version 2.0 of retail home.
Joint venture mode + professional managers to reduce business risks and stimulate sales vitality: this time, in the form of equity cooperation, they will jointly invest with powerful kitchen and clothing comprehensive agents in the system (they will not consider introducing new dealers and avoiding conflicts of interest for the time being). This is mainly due to the large investment of large stores in the early stage, coupled with the failure cases in the past, the dealers have concerns. At present, the company also takes shares. At the capital level, it gives some support to the dealer. At the same time, it helps and guides him to manage and promote. It sends personnel to the site to drive him through the most difficult process of building stores and obtaining customers in the early stage. After the business model runs through, it can be copied and promoted. At the same time, the board of directors and general managers are recruited with the incentive of a starting salary of 1 million yuan. There is no need to bring capital and start a business together. After the business runs smoothly one year later, professional managers can choose to transfer 10% of the shares of the joint venture according to the initial value, share the growth dividend and mobilize their enthusiasm.
Big home joint venture and packaged big home go hand in hand to jointly seize the market share of small and medium-sized brands
With regard to how to coordinate the interests of local cooperative agents or home decoration companies, we believe that:
(1) in terms of business positioning, the large home joint venture does have internal competition with the local packaged large home. However, due to the extreme dispersion of the home decoration market itself, even if the home decoration brands we have cooperated with can do 50 million in the city, they actually serve 400500 consumers and have a low share in the local market. Therefore, the competition will not be one ebb and flow, but jointly seize the share of small brands that do not have the whole decoration solution for consumers.
(2) Europa plays the role of housekeeper and does not participate in the implementation process of hard decoration: the decoration business company of large home stores will cooperate with local home decoration enterprises with excellent ability and qualification and need flow, provide them with construction requirements and do a good job in process supervision (similar to ODM). For consumers, it is more comfortable to have Europa brand for endorsement and home decoration. After cooperating with many leading home decoration companies in recent years, oupai has also summarized many technical standards in home decoration, including the design of SKU, which has the foundation to start management output.
Profit forecast and valuation
Looking forward to the next 22 years, we are optimistic that the company will continue to extend to the fields of software, main and auxiliary materials with kitchen, clothing and wooden bathroom as the core and leading information system as the bridge, provide real one-stop solutions, and reap the rapid growth of performance. It is estimated that the company will achieve revenue of 20.50/24.694/29.271 billion yuan in 21-23 years, with an increase of 39% / 20.5% / 18.5% respectively, and the net profit attributable to the parent company is 27.5/32.1/3.833 billion yuan, with an increase of 33.5% / 16.6% / 19.4% respectively, corresponding to the current PE 26.83/23.01/19.27x. As a leader of big home and strong alpha, Europa has prominent strength, its long-term share has increased, and maintains the “buy” rating.
Risk tips
The expansion of packaged business was not as expected, and the growth of new products was not as expected
