\u3000\u3000 Oppein Home Group Inc(603833) (603833)
Key investment points
Event: on January 24, 2022, the company issued the draft of the first phase of excellent employee stock ownership plan. The planned financing amount is no more than 70 million yuan. The shares are purchased through the secondary market. The purchase of this employee stock ownership plan will be completed within 6 months after the deliberation and approval of the general meeting of shareholders, and the duration is 36 months. The source of funds is the legal salary of the company’s employees and the loan support provided by the company’s controlling shareholder, Mr. Yao Liangsong. The legal salary of the company’s employees does not exceed 35 million yuan, and the loan provided by the controlling shareholder, Mr. Yao Liangsong, does not exceed 35 million yuan. Based on the calculation that the total scale of the employee stock ownership plan does not exceed 70 million yuan and the closing price of the company on 2022 / 1 / 24 is 141.09 yuan, the upper limit of the number of shares of the employee stock ownership plan is about 496100 shares, accounting for about 0.08% of the total existing share capital of the company. The participation scope of this shareholding plan includes directors, supervisors, senior managers and other core personnel of the company, with a total number of no more than 230, including no more than 7 directors, supervisors and senior managers of the company.
The employee stock ownership plan will improve the talent incentive system of the company and promote the long-term and healthy development of the company. Seven directors, supervisors and senior managers of the company account for 12.14% of the share holding plan, and other core employees account for 87.16% of the share holding plan. The company attracts outstanding employees by sharing operating results, so as to improve employee cohesion and the competitiveness of the company. In 2021, the revenue achieved a beautiful growth, and the profit side remained stable against the background of the rise in raw materials. The company expects the operating revenue to reach 19.899-21.373 billion yuan in 2021, with a year-on-year increase of 35% – 45%; In 2021, the net profit attributable to the parent company was RMB 2.640-2.846 billion, with a year-on-year increase of 28% – 38%. ESOP will further strengthen the company’s management and professional talent team and realize the long-term sustainable development of the company.
The product matrix is rich, and the whole packaging business drives the growth of the company. The company’s 2021q1-3 cabinet / wardrobe / bathroom / wooden door / other product categories achieved revenue of RMB 5.395/57.36/6.93/837/1.599 billion, with a year-on-year increase of + 30.63% / + 50.53% / + 38.11% / + 72.49% / + 125.94% respectively. The comprehensive layout of product categories helped the company grow. The company’s whole decoration business expanded the scope of large home, and the brand of European style whole decoration large home and star home developed rapidly. The company’s 2021q1-3 whole decoration channel revenue was 1.184 billion yuan, a year-on-year increase of + 95.09%. The company achieved rapid growth driven by whole decoration. We are optimistic that the packaging channel will become the main driving force for the company’s future development and continue to drive the long-term growth of the company’s performance.
Profit forecast and investment rating: the draft of employee stock ownership issued by the company shows the confidence in the long-term development of the company on the one hand, and binds the professional talent team to stimulate the development of the team on the other hand. We maintain the previous profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 2.72 billion yuan, 3.26 billion yuan and 3.86 billion yuan respectively, corresponding to PE32, 26 and 22x. The company has a solid leading position in the customization industry, obvious advantages in traditional distribution channels, rapid growth in bulk channels, leading its peers in the layout of packaged channels, and maintaining a “buy” rating.
Risk tip: the competition in the customization industry intensifies, the cost rises rapidly, the channel expansion is less than expected, and the decline of bargaining power leads to the decline of profitability.
