\u3000\u3000 Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
Report guide
The company issued the performance forecast for 21 years:
The net profit attributable to the parent company in 21 years was RMB 1.65-1.73 billion (+ 95% – 105%), which restored the impact of asset impairment loss in 20 years (484 million), with a year-on-year increase of 24-30%; The net profit deducted from non-profit was RMB 1.420-15 billion (+ 140% – 154%), and the impact of reduced impairment increased by 33% – 40%.
21q4 the net profit attributable to the parent company is expected to be 412-492 million (reduction impairment + 29% ~ 54%), and the non net profit deducted is 307-387 million (reduction impairment + 28% ~ 61%).
Key investment points
Q4 increased the proportion of domestic sales + increased the price to the ground, and the profit margin was better year-on-year
We estimate that the company’s Q4 revenue growth rate is about 20 +%, and the net profit margin attributable to the parent company is about 8.32% ~ 9.94% (20q4 is 7.74%), which is mainly due to the higher growth rate of domestic trade than export sales and the upward shift of profit margin structure. At the same time, the company implemented a new round of 5-8pct domestic price increase measures after the national day, which is good for the domestic gross profit margin. Q4tdi / MDI prices fell by 20-30% from the year-on-year high, and the company’s cost side pressure also weakened month on month.
Domestic sales: the same store + expansion drive the growth of domestic sales, and the medium and long-term momentum is still abundant
In the 21st year, the company’s channels continued to sink and encrypt, and new series stores such as functions and customization opened rapidly. It is expected that the caliber of series stores will increase by 1000 + stores, and the plan of opening 800-1000 stores will continue to be promoted in the 22nd year. At the same time, the increase in the proportion of large stores has led to the increase in the linkage rate among various categories, the expansion of customized categories has increased the customer unit value, and the regional retail operation has improved the conversion rate. It is expected that the same store will increase by 20 +%, with excellent performance, so as to ensure that the domestic sales will maintain a growth rate higher than that of the industry in 22 years.
Export: effectively deal with tariffs and anti-dumping, which is conducive to the improvement of export profit margin and market expansion
In December, the company announced that it planned to invest 1.037 billion to build a production base in Monterrey, Mexico, to produce high-end sofas, high-end functional sofas, high-end mattresses and other products. The project will start in 2022h1, with a construction period of three years, and the first phase is expected to start production in mid-2023. After reaching 100%, it can contribute an annual revenue of 3.019 billion and a total profit of 260 million. In the short term, the Mexican base will help the company effectively deal with sofa tariffs and mattress anti-dumping. At present, the company’s Vietnamese factory can only cover 30% – 40% of its business to the United States (accounting for about 20% of its total revenue). The rest of its production capacity is under the pressure of additional tariffs. Although it is shared through negotiation with customers, it still bears the tax burden of about 10%. The new plant will increase coverage and reduce the company’s profit loss caused by tariff / anti-dumping. In the long run, the Mexican base will help the company increase high-end SKU production, consolidate its export position and improve its market share.
The organizational structure continues to upgrade and the domestic operation is retail
1) in October, the company carried out in-depth adjustment of the management team (more than 1 / 3 of the post change), focusing on the improvement of the organizational capacity of the middle office and Taiwan: the main directions are ① in-depth integration of the value of foreign trade, production, research and marketing, people and property; ② Set up a middle and Taiwan product business department (assessed separately) to be responsible for the improvement of product strength of various categories. During the adjustment period in October, the company’s operation was not affected and showed Organizational Resilience.
2) focus on retail Digital Construction: enhance brand exposure, cross regional Wuxi Online Offline Communication Information Technology Co.Ltd(300959) diversion, empower store managers & shopping guides, and cultivate private traffic through “cloud + Management + platform”. Although the real estate cycle suppresses the marginal order growth, the home head brand can counter the interference of passenger flow through the full flow card.
Profit forecast and valuation
The company’s category integration + retail transformation + efficiency improvement casting long-term competitiveness is a high-quality consumption white horse we are optimistic about for a long time. We expect that the company will realize revenue of RMB 18.153/223.95/27.315 billion respectively from 21 to 23 years, with a year-on-year increase of 43.32% / 23.37% / 21.97%; The net profit attributable to the parent company was RMB 1.703/2.121/2.603 billion, with a year-on-year increase of 101.39% / 24.6% / 22.72%. The current market value corresponds to the PE of 21-23 years, which are 26.68x/21.41x/17.45x respectively, maintaining the “buy” rating.
Risk tip: channel construction fails to meet expectations, and real estate regulation exceeds expectations
