\u3000\u3 Shengda Resources Co.Ltd(000603) 816 Jason Furniture (Hangzhou) Co.Ltd(603816) )
Main points
After 40 years of deep cultivation of software home, it has gradually moved towards an integrated home operator
Jason Furniture (Hangzhou) Co.Ltd(603816) as China’s leading software home furnishing enterprise, taking sofa as the starting point, it expands to cloth sofa, functional sofa, soft bed, mattress, supporting products and customized home decoration products, and is committed to becoming a professional leader centered on “home”. The company has excellent growth ability, stable growth of revenue and profit, continuous prosperity of domestic and foreign sales demand, and continuous promotion of global production capacity layout. While the family business has strong coordination and control, it has introduced a team of senior professional managers to carry out a strong equity incentive plan. After performing their duties, the professional manager team started a series of reforms to form a division system, so that each product line can focus on its own field and help Gu family form differentiated advantages in various categories.
The advantages of the track are high, the growth continues, and the brand concentration is improved, which can be expected in the future
The software home furnishing industry is significantly polarized, the overall industry is developing healthily and actively, and the industry boom is high. Although the overall situation of the home furnishing industry is under pressure, from the perspective of market space, leading enterprises can have more opportunities to obtain integration dividends. From the production side, compared with customized home, finished home has a higher degree of standardization, which is easier to improve the industry concentration due to the cost advantage of leading enterprises, and form economies of scale from the factory side. From the demand side, the demand gap of overseas furniture has led to the substitution of production places, so that the growth of foreign trade of China’s soft furniture can benefit from China’s strong supply chain ability to maintain manufacturing and production after the epidemic
Improve product matrix + multi category collaborative development: build a leading household enterprise
The company insists on covering the whole category of life and home matrix from “single product – space – lifestyle”. High end Brand: sofa products have always been the core industry leader of family revenue. Under the background of China’s sofa consumption upgrading, Jason Furniture (Hangzhou) Co.Ltd(603816) strive to deploy China’s functional sofa and high-end sofa Market, and reach cooperation with well-known brands La-Z-Boy and naturzzi. Medium and low-end brands: launch the young light fashion brand “Tianxi school” to enhance the sinking market, further improve the medium and low-end series of the product matrix, and make the family move towards youth and fashion. High potential category: the penetration rate of China’s mattress industry is still low, and the company’s differentiation strategy promotes the rapid rise of mattress business performance. Firm customization + software integration: since the layout of customized furniture in 2016, the revenue has maintained rapid growth. It is planned to rapidly expand customized home stores and exceed 1000 whole house customized stores in 2022. Heavily released the strategic upgrade of “new generation whole house customization +” and launched the 49800 whole house package made by ourselves without patchwork. The customized products will be matched with supporting products to further realize the sales integration strategy.
Build a diversified channel system and keep pace with domestic and foreign sales
The company actively promotes the “1 + N + X” channel development model, and the deepening of channels will help the continuous growth of domestic sales revenue. Carry out channel reform and form multiple regional retail centers to realize the pre positioning of marketing functions and channel management functions, strengthen the synergy of terminal channel resources and firmly transform to retail. Combined with the market conditions of consumer countries in various countries, it has formulated a detailed international strategic plan. And improve the profitability of export business by strengthening export business management and improving management efficiency, manufacturing efficiency and supply chain efficiency. Innovative marketing mode, focusing on platforms such as xiaohongshu, Taobao and Tiktok, launched brand marketing activities such as “Zao super brand day for yearning”, “816 people’s home care day”, “yearning life, a new slogan for home care”, and made efforts to build consumer brands.
The construction of digital information system enables the company to operate in an all-round way
The company continues to experience digital business transformation. Starting from retail digitization, it empowers each store through information system. Combine with multiple brands to accelerate the digital transformation and strategic upgrading of enterprises. Build the whole process informatization, break the barriers at the three ends of production, manufacturing, sales and supply chain in the original system, realize the unity of information flow and product flow, and improve the efficiency of “end-to-end” industrial chain.
Investment advice
We expect that the company will realize operating revenue of 22.771/27.583/32.933 billion yuan in 22-24 years, with a year-on-year increase of 24.15% / 21.13% / 19.40%; The net profit attributable to the parent company was RMB 2.075/2.543/3.106 billion, with a year-on-year increase of 24.64% / 22.58% / 22.13%. The current market value corresponds to the PE of 22-24 years, which are 17.74x/14.47x/11.85x respectively Jason Furniture (Hangzhou) Co.Ltd(603816) is a leading enterprise of consumer goods furniture in China, with strong brand strength and product strength. Under the background of the post epidemic era, the restoration of customer demand, the improvement of overseas demand prosperity, and the sinking market of middle and low-end young brand Tianxi party have promoted the growth of the company’s traditional cloth sofa business income. In addition, the enterprise cooperates with lazboy, a leading company in the U.S. functional sofa Market. We are optimistic about the foreign trade development of functional sofa. Promote the penetration of new and low-end mattresses in the Mexican market. In terms of customized furniture, the domestic trade development of family layout customization and software integration, based on the differentiation model, is expected to usher in a new performance growth point. For the first time, give a “buy” rating.
Risk tips
The risk of rising raw material prices, intensified market competition, failure of real estate prosperity to meet expectations, and repeated outbreaks
