\u3000\u3000 Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
Events
The company disclosed the announcement on the advance increase of annual performance in 2021. In 21 years, the company is expected to realize the net profit attributable to the parent company of RMB 1.650-1.730 billion, with a year-on-year increase of 95% – 105%, and the net profit deducted from non-profit of RMB 1.420-1.500 billion, with a year-on-year increase of 140% – 154%.
Key investment points
The performance forecast of the company in 2021 is in line with the expectation, and the net profit attributable to the parent company is higher than that in the same period of 19 years: in 2021, the company is expected to realize the net profit attributable to the parent company of RMB 1.650-1.73 billion, with a year-on-year increase of 95% – 105%. Taking the performance forecast center of RMB 1.69 billion, it will double that in 2020. Compared with the whole year of 19 years before the epidemic, the performance of the company in 21 years is expected to increase significantly by 42% – 49%; Looking at 21q4 alone, it is estimated that the net profit attributable to the parent company will reach 412-492 million yuan, an increase of 69% – 102% over the same period of 19 years. In the market environment of epidemic spreading and increasingly fierce competition in China, the company actively grasped industry opportunities, gave full play to scale benefits and channel advantages, increased brand and R & D investment, and realized steady growth of profits.
Invest 1 billion yuan to build Mexico production base, and the company’s overseas production capacity is further deepened. The company’s capacity is mainly distributed in the Chinese mainland’s East, central, North and southwest China, as well as Vietnam and Malaysia. In December 14, 2021, the company announced that it would invest 1 billion 37 million yuan for the construction of Mexico production base for the production of high-end soft sofa. For high-end intelligent functional sofas, high-end mattresses and other products, the project is expected to start in the first half of this year, with a construction period of 36 months. The first phase of the project is expected to be completed in 2023h1. After the overall completion of the project, it is expected to achieve a total revenue of 3.019 billion yuan. In 2021h1, the company’s export revenue accounted for about 40%, mainly exported to the United States and Canada. On the one hand, this overseas capacity layout is beneficial to shorten the transportation radius of export business to North America, improve customer response ability, expand market share in North America and even the world, and on the other hand, reduce the uncertainty of Sino US trade relations faced by the company, Enhance the long-term competitiveness of foreign trade business.
There is broad room for domestic market share improvement, and foreign trade profitability is expected to be repaired: in terms of domestic sales, the company’s domestic sales business increased by about 40% in the first three quarters of 2021, continued to practice the whole house big home strategy, and promoted the integrated layout of “customization + software”. The concentration of China’s furniture industry is still at a low level. The company accelerated the construction of whole house customization and integrated store channels, We will broaden the layout of price bands of various categories, have a clear growth path, and have broad room to increase the share of domestic market. In terms of foreign trade, the company’s foreign trade business has sufficient orders on hand, the prices of shipping and raw materials disturbing its profitability have been marginally improved, and its profitability is expected to be repaired. With the release of overseas new capacity, the foreign trade business will further open up growth space.
Investment suggestion: the company’s performance forecast is in line with expectations, and the performance in 21 years is expected to achieve a beautiful growth compared with that before the epidemic. We maintain the profit forecast. It is expected that the company’s earnings per share in 2021-2023 will be 2.65, 3.38 and 4.18 yuan respectively, and the return on net assets will be 21.5%, 24.7% and 27.2% respectively. The closing price on January 13 corresponds to about 21 times of the company’s 22-year PE, Maintain the “buy-b” recommendation.
Risk warning: the effect of price increase is not as expected; The epidemic situation in China has repeatedly disturbed offline sales; Real estate industry policy uncertainty.
