\u3000\u Guangzhou Improve Medical Instruments Co.Ltd(300030) Bingshan Refrigeration & Heat Transfer Technologies Co.Ltd(000530) 0005)
Key investment points:
In the short term, due to the impact of the company’s Tianjin epidemic, the shipment of outdoor equipment in Q1 is only growing in double digits, but it has shown high growth since Q2: we believe that the outdoor and camping industry is growing explosively, Toread Holdings Group Co.Ltd(300005) as a leader in the industry, it is expected to benefit fully. According to magic mirror data, the company’s sales have increased significantly in the near future. In the medium and long term, the main business of shoes and clothing is expected to restart after the epidemic, and there is room for superposition of store efficiency + discount deposit. In addition, the company’s acquisition of 60% equity of Beijing core energy is expected to create a second growth curve. Beijing core energy promises to achieve a net profit of no less than 0 yuan / 859745 million yuan / 172 million yuan in 2022 / 2023 / 2024 respectively. We believe that Beijing core energy has certain technical advantages and the company’s production expansion plan is clear. With the release of chips driven by the high boom in the downstream, it will help the company digest new production capacity and enhance the possibility of fulfilling performance commitments. It is estimated that the revenue in 2022, 23 and 24 will be RMB 1.54/20.51/2.617 billion respectively, the net profit attributable to the parent company will be RMB 0.74/174257 million respectively, the EPS will be RMB 0.25/0.59/0.87 respectively, the closing price on May 17, 2022 will be RMB 8.14, and the corresponding PE will be 33 / 14 / 9x respectively. It will be covered for the first time and rated as “overweight”.
Camping business: Q2 has entered a high growth period, and mountaineering tents and hammocks are traditional advantageous categories
According to our analysis, the company’s advantages lie in: (1) brand advantage, Toread Holdings Group Co.Ltd(300005) started with tents. Although it focused on the development of shoes and clothing after listing, it always maintained the category of tents, and professional mountaineering tents and hammocks have the advantage of word-of-mouth; (2) Capacity advantage: at present, in addition to Comefly Outdoor Co.Ltd(603908) having its own capacity, most companies rely on outsourcing, while Toread Holdings Group Co.Ltd(300005) has its own capacity and maintains close cooperation with core suppliers. (3) In terms of design, the company launched high-end multi person cotton tents, exquisite camping lightweight tents, leisure camping and parent-child accounts. In 2022, it launched camping products jointly with teenie weenie and camping products jointly with the famous animation IP Doraemon. At present, there are exquisite camping tents priced at 5900 yuan. Other equipment products include: sky curtain, aluminum alloy folding table, egg roll table, Moon chair, folding bed, sleeping bag, cooking utensils, etc. to create exquisite camping scenes. (4) In terms of marketing, the company has increased publicity and promotion this year, and the general manager participated in the camping topic of the financial dialogue column of China Central Television.
Outdoor shoes and clothing business: the market share of stormsuit is leading, and there is still room for improvement in store efficiency
According to our analysis, the advantages of the company in the field of outdoor shoes and clothing lie in: (1) the market share of stormsuit is leading. (2) The company has high Tief fabric barriers, sponsors the Antarctic scientific research team, and demonstrates its scientific and technological advantages with national endorsement.
According to our analysis, the future space of the company lies in: (1) channel expansion: in 2021, the total number of stores of the company was 786, including 179 direct sales / 607 franchises, a year-on-year decrease of 213. The integration of closing stores of the company is nearing the end, and it is expected to restart after the recovery of the epidemic situation. (2) There is still room for improvement in store efficiency. At present, the company’s store efficiency is only about 1 million yuan, which still has a large room for improvement compared with its garment peers. (3) The improvement of terminal discount is expected to contribute to the increase of gross profit margin. In recent years, terminal discount has improved, from 50% to about 70%. In the medium and long term, there is still room for improvement against the scale of Colombia, northface and Archaeopteryx of 1.5-2 billion yuan.
Mini led business: am driven technology has advantages and barriers, and will continue to expand production in the future
In terms of PKG products, Beijing Xinneng plans to build five PKG product lines, which are expected to be fully put into operation by the end of June 2023. After full production in 2024, the annual production capacity of indoorpkg / outdoor PKG products will be 286 million and 429 million respectively. At the same time, Beijing Xinneng made a performance commitment to achieve a net profit of no less than 0 yuan / 859745 million yuan / 172 million yuan in 2022, 2023 and 2024 respectively. We believe that Beijing Xinneng has certain technical advantages and the company’s production expansion plan is clear. With the release of chips driven by the high boom in the downstream, it will help the company digest the new production capacity and enhance the possibility of fulfilling performance commitments.
Risk tips
Uncertainty of epidemic development, uncertainty of acquisition progress, uncertainty of acquisition target performance, camping sustainability and systemic risk.
