\u3000\u3000 Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
Events
The company released the performance forecast. It is estimated that in 2021, the net profit attributable to the parent / net profit deducted from non attributable to the parent will be RMB 1.65 ~ 1.73 billion / 1.42 ~ 1.5 billion, with a year-on-year increase of + 95% ~ 105% / + 140% ~ 154%, of which 4q’s net profit attributable to the parent / net profit deducted from non attributable to the parent will be RMB 410 ~ 490 million / 310 ~ 390 million respectively. After restoring the profit in 2020 (excluding the impact of goodwill impairment of the company), In 2021, 4q net profit attributable to the parent company / net profit deducted from non attributable to the parent company were + 28.8% ~ 53.8% / + 25.3% ~ 58.0% year-on-year respectively, and the performance was in line with expectations.
Brief comment
Strong growth in domestic sales scale, smooth implementation of price increase and boost performance fulfillment: according to channel research, the company’s domestic 4q shipments continue to grow rapidly, and the domestic sales revenue is expected to grow by 25% – 30%. In terms of export, due to the high base last year and the gradual recovery of overseas demand, the growth rate of 4q is expected to slow down slightly. From the profit side, the price increase of the company’s domestic products in October is relatively smooth, and the cost pressure is better transferred. It is expected to boost 4q’s domestic net interest rate to a better level, so that the annual performance can be realized.
The pressure on raw materials is relieved, and the elasticity of export profits in 22 years is expected: the company’s net export interest rate is expected to drop to 0-5% in the first three quarters of this year due to the rise of raw materials superimposed shipping prices. At present, the price pressure of raw materials has begun to ease significantly. Compared with the annual average price of 2021, the price of MDI / polyether in early January 2022 has decreased by 5.6% / 32.1% respectively. Next year, the company’s export business will rely on the joint promotion of OEM and private brand businesses, and the revenue will continue to grow steadily. The profit elasticity of the company’s export business can be expected.
The advantages of full category integration are becoming more and more obvious, the growth path is clear, and the valuation center is expected to rise: the company has continued to deepen the “1 + N + X” channel layout in recent years, and the status of large home stores has continued to upgrade. Under the general trend of category integrated sales, the regional retail center superimposes the “warehouse service” currently in the pilot, which will empower dealers in many aspects, It helps dealers\’ large home operation more smoothly and significantly promotes the growth of the three high potential categories of customization + function + mattress. With the gradual growth of customization business, its software drainage effect will gradually appear. The company’s integrated sales advantage of all categories is becoming more and more obvious. The company’s growth path is clear and its own α The attribute is prominent. When the performance is gradually realized, the valuation is expected to improve steadily.
Investment advice
We maintain the previous profit forecast. It is estimated that the EPS from 2021 to 2023 will be 2.70 yuan, 3.37 yuan and 4.12 yuan respectively, and the corresponding PE of the current stock price will be 28x / 22x / 18x respectively, maintaining the “buy” rating.
Risk tips
Category integration progress is lower than expected; The price of raw materials has increased significantly; The efficiency of overseas factories is lower than expected.
