\u3000\u3000 Xlinmen Furniture Co.Ltd(603008) (603008)
Event: the company issued the announcement of performance increase in 2021. The company expects that in 2021, the net profit attributable to the parent company will reach 550-560 million yuan, an increase of 75.5% – 78.7% at the same time, and the deduction of non net profit will reach 495-505 million yuan, an increase of 58% – 61.1% at the same time. Excluding the impact of film and television business, we expect the company’s annual net profit attributable to the parent company to increase by about 68% – 71% under the same caliber, and the net profit attributable to the parent company in Q4 to decrease by about 3.7% – 1.8% year-on-year.
It is expected that Q4’s independent brand retail business will maintain medium and high growth, and the profit growth will be affected by the high base and the impairment of some bills. Under the same caliber, the growth center of 21q4 attributable net profit corresponding to the performance forecast is – 1.0%, and the apparent growth rate is low. We expect the profit margin in a single quarter to decline compared with the same period last year, which is mainly affected by the rhythm of profit release and high base. In addition, we expect some bills to be impaired in Q4. In the long run, with the release of scale effect, OBM business is still in the channel of profit margin improvement.
Focus on the main household industry, practice the brand leading strategy, and increase the income of independent brands. Under the background of the rise of domestic products, the company firmly adheres to the brand leading strategy, actively advocates the dissemination of the concept of “deep and good sleep”, continues to increase brand investment, build brand strength, and continue to make efforts in independent brand retail. In the first three quarters of 2021, the retail business revenue of independent brands was 3.271 billion yuan (+ 85%), and the revenue of 21q3 was 1.279 billion yuan (+ 58%). Among them, the revenue of offline channels in the first three quarters was 2.587 billion (+ 89%), and Q3 increased by 61% in a single quarter. Online channel companies sought growth through emerging marketing modes such as live broadcasting, realizing revenue of 684 million (+ 70%), and Q3 increased by 47% in a single quarter.
The construction of diversified channels is accelerated, and Ximian distribution helps the channel sink. By the end of 21q3, the company had a total net increase of 653 stores, of which 2753 stores were Xlinmen Furniture Co.Ltd(603008) (+ 413 stores). The market of Ximian series continues to sink, with 945 Ximian distribution stores (+ 145), M & D stores expanding steadily, and 598 M & D and xiatu stores (+ 95). The company operates steadily and its channels expand rapidly. Offline stores and online platforms work together, adding distribution stores and community stores as supplements. The construction of “1 + n” diversified channel sales network is gradually taking shape.
Equity incentive and employee stock ownership unite the people and are optimistic about the continuous improvement of China’s market share. The company issued the 2021 equity incentive plan (Draft) on December 9. The plan plans to grant 4 million stock options to 167 people, including middle-level managers and core technology (business) backbones of the company, with an exercise price of 31.16 yuan / share. The assessment year of the equity incentive plan is 2022-2024, and the corresponding net profit target of the assessment target 2022-2024 is 714 million yuan, 923 million yuan and 1.205 billion yuan, with a same increase of 29.39% and 30.51% in 23 and 24 years; The revenue target is 9.334 billion yuan, 11.696 billion yuan and 14.62 billion yuan, with an increase of 25.30% and 25.00% in 23 and 24 years. Since focusing on the main business, the refined management of the company’s products, brands and channels has been continuously improved, and the company is optimistic about the continuous volume of its own brand retail business.
Investment suggestion: the company focuses on the main furniture industry, the brand strategy continues to develop, and the omni-channel sales network expands rapidly, which is expected to continue to grow at a medium and high speed. We expect that the company’s sales revenue from 2021 to 2023 will be RMB 7.52 billion, RMB 9.48 billion and RMB 11.9 billion, with a year-on-year increase of 33.7%, 26.1% and 25.5%, and the net profit attributable to the parent company will be RMB 550 million, RMB 730 million and RMB 930 million (the independent brand has made efforts and raised the profit forecast, and the previous forecast value was RMB 540 million, RMB 730 million and RMB 930 million), with a year-on-year increase of 77.2%, 32.3% and 26.9%, and EPS of RMB 143, RMB 190 and RMB 241, maintaining the “buy” rating.
Risk tips: the risk of decline in the prosperity of real estate, the risk of higher than expected cost investment, and the risk of intensified industry competition
