\u3000\u3000 Xlinmen Furniture Co.Ltd(603008) (603008)
Events
The company disclosed the announcement on the advance increase of annual performance in 2021, and it is expected to realize the net profit attributable to the parent company of RMB 550-560 million in 2021, with a year-on-year increase of 75.49% – 78.68%; The net profit deducted from non profits was 495-505 million yuan, with a year-on-year increase of 57.95% – 61.14%.
Key investment points
The independent brand retail business line made joint efforts offline, and the 21q4 performance growth increased month on month. In 2021, the company expects to realize a net profit attributable to the parent company of RMB 550-560 million, with a year-on-year increase of 75.49% – 78.68%. It is expected that the offline and online channels of the independent brand retail line of the revenue side company will expand rapidly. As of the first half of the year, the company has 2576 Xlinmen Furniture Co.Ltd(603008) stores, 898 Ximian distribution stores, 489 M & D sofa stores and 54 chateau’ax living room furniture stores. A total of 374 stores will be added in 21h1, and 800-1000 stores are planned to be added in 2022. The online channel company has cooperated with tmall, JD Suning.Com Co.Ltd(002024) and other core e-commerce platforms have formed in-depth cooperation. In the 21st double 11, the company’s pre-sale amount on tmall platform exceeded 100 million yuan in only 19 minutes, and the one hour turnover ranked first in the sales of all categories. The single 4D maglev Pro sleeping mattress sold 34000 pieces. On the performance side, it is expected that the optimization of the company’s product structure will release the scale effect and the profitability will continue to rise. The year-on-year growth rate of net profit attributable to the parent company in 21q1 / Q2 / Q3 was 255.6% / 37.5% / 13.4% respectively, and the net interest rate was 7.79%, 7.82% and 8.48% respectively. According to the company’s performance forecast, we expect the company’s net profit attributable to the parent company in 21q4 to reach 176-186 million yuan, a year-on-year increase of 32.3% – 39.8%, and the performance growth rate in the fourth quarter increased month on month.
Employee stock ownership and equity incentive plans fully mobilize the enthusiasm of the team, set high growth goals, and demonstrate long-term development confidence. On December 10, 2021, the company launched an employee stock ownership plan for 42 directors (excluding independent directors), supervisors, senior managers and core managers. The maximum amount of raised funds is 350 million yuan, and the scale of the stock ownership plan does not exceed 6.767 million shares, accounting for about 1.75% of the total share capital of the company on the announcement date of the draft employee stock ownership plan. On the same day, the company granted a total of 4 million stock options to 167 middle-level managers, core technology (business) backbones and other personnel deemed necessary by the board of directors, with an exercise price of 31.16 yuan / share. According to the company level performance assessment objectives, it is estimated that the company’s revenue in 2022-2024 will be RMB 9.335 billion, RMB 11.696 billion and RMB 14.621 billion respectively, and the net profit attributable to the parent will be RMB 715 million, RMB 925 million and RMB 1.207 billion respectively. The CAGR of revenue and net profit attributable to the parent in 2020-2024 will be 27% and 40%. The company also issued employee stock ownership and equity incentive plans, covering a wide range of employees, which is expected to fully mobilize the team’s enthusiasm and improve the team cohesion. The objectives of the incentive plan are set higher, and the growth rate of net profit attributable to the parent is faster than that of revenue, demonstrating the company’s confidence in long-term high-quality growth.
Investment suggestion: the company’s film and television business in the past 21 years has been listed, focusing on the home business, and the annual performance has ended beautifully. Xlinmen Furniture Co.Ltd(603008) as the leader of Chinese mattresses, offline stores continue to expand. In the future, the proportion of independent brand retail business will increase, driving the net interest rate upward. Superimposed with the sinking layout of Ximian brand, the market is expected to benefit from the dividend of furniture going to the countryside policy, and is optimistic about the company’s share in China’s mattress market. We estimate that the company’s operating revenue from 2021 to 2023 will be RMB 7.32 billion, RMB 9.4 billion and RMB 11.74 billion respectively, with a year-on-year increase of 30.1% / 28.5% / 24.8%, and the net profit attributable to the parent company will be RMB 555 million, RMB 720 million and RMB 929 million respectively, with a year-on-year increase of 77.1% / 29.8% / 29.0%. The latest closing price corresponds to about 19 times of the company’s PE in 22 years, which is covered for the first time. We give “buy-b” suggestions.
Risk warning: raw material price fluctuation risk; The opening of offline stores was not as expected; Competition in the home furnishing industry has intensified.
