\u3000\u3000 Xlinmen Furniture Co.Ltd(603008) (603008)
Event: the company issued the announcement on the advance increase of annual performance in 2021. It is estimated that the net profit attributable to the parent company will reach 550 million yuan to 560 million yuan in 2021, an increase of 237 million yuan to 247 million yuan compared with the same period of last year, with a year-on-year increase of 75.49% to 78.68%; It is estimated that the net profit attributable to the parent company after deducting non profits will reach 495 million yuan to 505 million yuan, an increase of 182 million yuan to 192 million yuan compared with the same period of last year, a year-on-year increase of 57.95% to 61.14%.
Comments:
Product strength and brand strength were effectively highlighted, and the annual business performance exceeded expectations. The company’s product side is deeply engaged in sleep products, and the brand side continues to increase brand investment and adhere to the brand leading strategy, which effectively highlights the company’s product power, and the independent brand continues to grow at a high speed, driving the beautiful growth of annual performance. From the perspective of single quarter, the company’s Q4 single quarter net profit attributable to the parent company is expected to reach 176 million yuan to 186 million yuan, with a year-on-year increase of 32.26% ~ 39.76%; In a single quarter, it is expected to realize a net profit of 170 million yuan to 180 million yuan after non deduction, with a year-on-year increase of 16.88% ~ 23.75%. Overall, the company’s annual operating performance exceeded market expectations.
Equity incentive shows growth confidence, and product channels are available. We hope to take the furniture to the countryside. The company disclosed the equity incentive plan in December 2021, and plans to grant 4 million stock options to the incentive objects. This incentive plan has a wide range of grants and high performance evaluation objectives, which shows the company’s confidence in future growth. At the same time, the company’s Wuxi Online Offline Communication Information Technology Co.Ltd(300959) channel construction is stable, the online channel is growing rapidly, and the sinking of offline channel is leading. By the first half of 2021, the total number of offline stores of the company has exceeded 4000. Superimposed with the price belt of the company’s products, the company is expected to benefit from the subsidy policy for furniture going to the countryside from the perspective of category, channel and price belt, so as to promote the market share of the company to a higher level.
Investment suggestion: the independent brand performs well, the furniture going to the countryside policy may accelerate the growth, and maintain the “buy” rating. Considering that the equity incentive of the company binds the interests of the core management and employees, the management team steadily contributes to the company’s growth and the furniture going to the countryside policy is expected to accelerate the improvement of the company’s revenue and profit performance, we raised the company’s profit forecast, and it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 560 / 72 / 930 million respectively (the original forecast value was RMB 500 / 630 / 780 million), Corresponding to the current market value, PE is 25 / 19 / 15x respectively, maintaining the “buy” rating.
Risk tip: the cost of raw materials fluctuates sharply, the real estate market fluctuates, and the channel development is less than expected.
