\u3000\u3000 Jason Furniture (Hangzhou) Co.Ltd(603816) (603816)
The company is a leading enterprise in China's soft furniture industry. The company is a member of the first echelon in China's soft furniture industry. The company has diversified product layout, gradually moving towards whole house customization and common development of domestic and foreign sales. The gap between Gu's revenue and Minhua's continues to narrow. In 2021h1, the net profit of Gu's return to its parent company has exceeded Minhua's, the net interest rate has recovered rapidly after the epidemic, and the operating efficiency is leading among the top 4 companies in the industry. The actual controller of the company is the Gu family, and the equity is relatively stable. The company introduced professional managers earlier, and the senior management team is relatively stable.
The leading enterprises in the industry still have great room for growth. China's soft furniture industry is developing towards customization and intelligence. The output value and sales of China's soft furniture industry increased rapidly. In 2017, China became the world's largest producer and consumer. Housing sales, rental housing, penetration rate, renovation rate, "furniture to the countryside" policy and other factors jointly promote the volume increase, and GDP, residents' disposable income, expenditure distribution, decoration budget and other factors jointly promote the price increase. We predict that the scale of China's soft furniture market from 2022 to 2025 will be 165.7 billion yuan, 178.1 billion yuan, 186.4 billion yuan and 194.6 billion yuan respectively, with a year-on-year growth rate of 5.89%, 7.48% and 4.63% respectively 4.41%。 The concentration of Chinese sofa industry is 17.33% (top 3), and that of American sofa industry is 51% (top 4); The concentration of China's mattress industry is 19.5% (TOP4), the concentration of the American mattress industry is 79% (top5), and the concentration of China's sofa and mattress industry has great room to rise.
Focus of the company: global layout of production capacity and simultaneous development of domestic and foreign sales
Product side: Gu family started with sofa. In 2020, sofa revenue accounted for half of the main business composition, and the company continued to move towards full house. From the perspective of sofa, Gu family focuses on leather sofa and Minhua focuses on functional sofa. Minhua Holdings has a high income and Jason Furniture (Hangzhou) Co.Ltd(603816) is gradually narrowing the gap with it. From the perspective of soft beds and mattresses, the family price is not high, and the income growth is fast. In the future, the company will focus on the strategic development of three high potential categories: function, mattress and customization.
Capacity side: Jason Furniture (Hangzhou) Co.Ltd(603816) is constantly expanding China's capacity. At present, three projects are still under construction and not put into operation. Affected by the Sino US trade friction and the anti-dumping investigation launched by the United States against Chinese mattress enterprises, the export of Chinese mattress enterprises is facing rising cost pressure. Leading enterprises in the soft furniture industry led by Jason Furniture (Hangzhou) Co.Ltd(603816) have arranged foreign production capacity to resist risks. The company announced at the end of 2021 that it plans to invest about 1.037 billion yuan to build its own production base in Mexico. When it reaches the overall goal, it is expected to realize an operating revenue of about 3.019 billion yuan.
Channel side: the domestic "1 + N + X" channel layout sinks the market, mainly dealers, and the number of offline stores is increasing year by year. At present, it ranks first in the industry. The company actively arranges e-commerce channels. At present, the proportion of e-commerce is relatively low and there is still room for improvement. The international market is picking up, focusing on export ODM business and focusing on the implementation of key customer strategy.
Marketing side: the company has many marketing and publicity methods, and the advertising fee increases year by year, which is the highest among the top 4 enterprises. The integrated sales strategy of soft furniture and customized design improves the customer unit price of stores and the sales volume of supporting products.
Investment suggestion: it is estimated that the company's EPS from 2021 to 2023 will be 2.69 yuan, 3.3 yuan and 3.99 yuan respectively. The current price earnings ratio of the stock price is 28 times, 23 times and 19 times respectively. The company will be given a "buy" rating for the first time.
Risk tips: real estate market risk, exchange rate fluctuation risk, Sino US trade friction risk, raw material price risk.
