\u3000\u3000 Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
Event: the company released the performance forecast for 2021. The company expects the net profit attributable to the parent company to be RMB 1.65 ~ 1.73 billion in 2021, a year-on-year increase of + 95% ~ + 105%. If the impact of goodwill impairment last year is excluded, a year-on-year increase of + 24.15% ~ + 30.17%; The net profit attributable to the parent company in Q4 was 412 ~ 492 million yuan, excluding the impact of goodwill impairment last year, with a year-on-year increase of + 28.75% ~ + 53.75%; Q4 deduction of net profit not attributable to parent company was 307 ~ 387 million yuan, excluding the impact of goodwill impairment last year, with a year-on-year increase of + 25.31% ~ + 57.96%. Channel expansion brings revenue growth, and the upward elasticity of short-term profits is still expected. The profit side is basically in line with our expectations. We expect Q4 revenue side to also have a good growth. The growth of revenue is mainly due to the increase in the number of channels and the improvement of store efficiency. We speculate that about 1000 stores will be opened in 2021, and there is still a large space for new categories. It is expected that the number of new stores in the next few years will be similar to that in 2021, which will continue to bring revenue increment. The improvement of store efficiency stems from the smooth promotion of the multi category strategy. Based on sofas, the company expands new categories such as bed products, integrated products and customized products, integrates the supporting sales rate of various categories in the store, and continuously improves the customer unit price. In terms of profit, the smooth price increase in October brought about an increase in profit margin. In addition, in terms of export, the sea freight also fell in Q4. Therefore, we speculate that the profit growth rate is higher than the revenue. We believe that in the short term, the improvement of store efficiency of new stores and the continued decline of raw materials and sea freight will still bring upward flexibility to the company’s profits.
The smooth promotion of the big home strategy has brought sustainable growth momentum to the company. The company actively expands the price band of sofa categories, and expands categories with high growth potential such as bed products, integrated products and customized products with the help of brand and channel advantages. This year, the low-end sofa brand tianxipai and high-end functional sofas have achieved rapid growth. At the same time, the supporting sales rate of new categories has continued to improve, and the big home strategy has been promoted smoothly. The company promotes the construction of regional retail center and channel informatization to improve channel efficiency; This year, China Taiwan business department will be established to strengthen product strength. The company continues to optimize the organizational structure and provide support for the big home strategy. In the future, there is great room for improvement in channel and store efficiency.
Export short-term profits have great upward flexibility, and overseas capacity layout continues to improve competitiveness. Under the pressure of transportation capacity, freight and tariff, we speculate that the company’s export sales will still achieve a high income growth this year, and the orders on hand are full, showing a strong toughness of the export business. The sea freight has been corrected since September, and the distance between China and the United States has dropped by about 30%. With the gradual easing of the problem of port congestion, there is still much room for the sea freight to decline. Superimposed on the possible tariff reduction and raw material price drop, the company’s export business still has great profit elasticity. In the long run, the overseas production capacity is gradually implemented, the operation capacity is continuously polished and improved, the company’s export competitiveness is expected to be improved, and it is expected to continue to achieve steady growth in the export market.
Profit forecast and investment rating: we believe that the current brand value of upholstery furniture has increased, and its dependence on a single channel has gradually decreased. As an industry leader, Jason Furniture (Hangzhou) Co.Ltd(603816) is expected to continue to increase the company’s share by virtue of its brand advantage. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1.699 billion, RMB 2.143 billion and RMB 2.661 billion respectively, and the EPS will be RMB 282 million, RMB 3.56 million and RMB 4.42 respectively. At present, the corresponding PE of the stock price is 25.46, 20.19 and 16.26 times respectively. We maintain the “recommended” rating.
Risk tip: the epidemic situation exceeded expectations, the price of raw materials increased more than expected, and the price of sea freight increased more than expected.
