\u3000\u3000 Oppein Home Group Inc(603833) (603833)
Core view
Event: the company announced that the annual performance of 2021 will be increased in advance. It is expected that the annual revenue of 2021 will reach 19.899-21.373 billion yuan, with a year-on-year increase of 35-45%; The net profit attributable to the parent company is expected to be RMB 2.640-2.846 billion, with a year-on-year increase of 28-38%. Among them, the revenue in the fourth quarter is expected to reach 5.497-6.971 billion yuan, a year-on-year increase of 10-39%; The net profit attributable to the parent company is expected to be 527-733 million yuan, with a year-on-year growth rate of about – 14% to 20%.
Revenue growth in the fourth quarter exceeded market expectations, and profits met expectations. The company’s 2021q4 revenue is expected to increase by 10-39% year-on-year, exceeding market expectations. Compared with the growth rate of retail sales in the furniture industry in the same period (2021q4 decreased by 5% year-on-year), the company, as a leader in the customized home industry, is accelerating its share. On the profit side, under the background of the continuous rise of raw material costs, the company still maintains a strong rush subsidy policy for the terminal. It is estimated that the net profit attributable to the parent in 2021q4 is about 7.6-13.3% and the central is about 10.4%, and the profit is in line with the expectation.
The big home strategy continues to deepen, and it is speculated that wardrobe, accessories and packaging channels constitute an important driving force for the company’s revenue growth. With the rapid promotion of the whole customization and decoration business under the big home strategy, we speculate that the driving force of the company’s revenue growth in the fourth quarter of a single year mainly comes from the wardrobe, supporting products and decoration channels: ① relying on the dealer retail channel, the company upgraded 19800 meals in the early stage to 29800 packages (20 ㎡ customized cabinet + 10 pieces of whole house furniture + 3 ㎡ background wall) in September 2021, By increasing the customization + software matching rate and helping to improve the customer unit price, it is expected to drive the steady growth of the company’s wardrobe and accessories revenue; ② As for the whole decoration channel, the investment promotion of the whole decoration home has been promoted rapidly driven by the dual brands of europay + starhomes. By the end of the third quarter of 2021, the whole decoration home of the company has 700 stores and agents covering nearly 600 cities; At the same time, the company activated retail agents to cooperate with local decoration enterprises, continued to deepen channel reform and innovation, and jointly promoted the rapid growth of the scale of the whole decoration business.
The strength of brands, channels and products has been continuously strengthened to help accelerate the increase of the company’s share. ① At the brand side, the company has formed a brand matrix of “Bonis”, “europay” and “europelli”, which comprehensively cover the three markets of high-end, medium and high-end and young fashion. ② at the channel side, the decoration enterprise model of large-scale decoration home and retail agents jointly promote the rapid and large-scale decoration business and usher in the harvest period, and the company’s customer acquisition strength continues to be strengthened; At the same time, the company launched the one-stop customization platform of main and auxiliary materials “opalati x europay superior materials” in July 2021. Now it has settled in the head brands of loading materials such as mink tigus, Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Honeywell, Siemens, Skshu Paint Co.Ltd(603737) and Dulux. Through the integration of downstream loading enterprises and upstream loading materials, it is expected to quickly open the flow space. ③ On the product side, relying on the accumulation of information technology, product R & D, supply chain and other system capabilities, the company’s terminal retail package options are expected to be further enriched, and the customer unit price still has great room for improvement. In the medium and long term, the advantages of the company’s full category, all channel and national capacity layout will become more and more prominent. It is expected to continue to achieve growth higher than the industry average. It is optimistic that the company’s share will accelerate and the leading advantage of customized home furnishings will be stable.
Profit forecast and investment suggestions
Combined with the changing trend of real estate boom, the growth assumption of bulk income in the next two years is appropriately lowered, and the net profit attributable to the parent company is predicted to reach RMB 2.745/32.99/3.869 billion from 2021 to 2023 (previously predicted to be RMB 2.755/34.27/3.859 billion). As a leader with leading scale advantages in the customized home furnishing industry, the company’s core competitiveness is built by multi category and omni channel layout superimposed with informatization, which is expected to achieve steady growth in the era of large home furnishings. The DCF target valuation is 199.84 yuan and the “buy” rating is maintained
Risk tips
The risk that the completion of the property is less than expected; Risk of intensified industry competition
