Dongxing Securities: Overweight rating of Oupai Home

2022-01-21Dongxing Securities Co., Ltd. Liu Tiantian, Chang Zijie, Shen Yilun conducted a study on Oupai Home and released a research report "Q4 revenue slightly exceeded expectations, and the strategy of big home was effective", this report gave an overweight rating to Oupai Home, and the current stock price was 140.9 yuan.

Opal Home(603833)

Event: The company expects revenue in 2021 to be 19.899 billion yuan to 21.373 billion yuan, +35% to +45% year-on-year; net profit attributable to the mother of 2.640 to 2.846 billion yuan, +28% to +38% year-on-year; deduction of non-net profit of 2.477 billion yuan to 2.671 billion yuan, +28% to +38% year-on-year. Among them, Q4 revenue was 5.497 billion yuan to 6.971 billion yuan, +10% to +39% year-on-year; Q4 net profit attributable to the mother was 527 to 733 million yuan, year-on-year -14% to +20%; Q4 deducted non-net profit of 463 million yuan to 657 million yuan, year-on-year -15% to +20%.

The big home strategy drives revenue growth, and profits are under pressure in the short term due to the impact of raw materials. The company's Q4 revenue side growth slightly exceeded expectations. In the context of only a slight increase in furniture retail sales year-on-year, the company continued to promote the strategy of retail and decoration of large homes, the category continued to develop, and the unit price of customers gradually increased, making the company achieve a higher revenue growth rate than the industry. In terms of splitting, we speculate that the rapid growth of wardrobes is the main source of revenue growth; cabinets maintain steady growth; in addition, wooden doors and bathrooms and other new categories are growing rapidly. In the future, we will continue to be optimistic about the mutual promotion of the company's channel innovation and category expansion, so as to achieve a development speed higher than that of the industry. Q4 raw material prices further rise, superimposed bulk business this year due to intensified competition and gross margin decline, the company's profit side in a high base under pressure, considering the company's strong cost control capabilities, it is expected that the Q4 profit side can achieve a slight increase. In the face of rising raw material prices, as an industry leader, the company is expected to rely on its brand power to carry out smoother price increases and cost control, and maintain a better profit level than the industry.

The advantages of retail channels are obvious, and the risk of steady development of bulk business is controllable. The company has a solid advantage in the traditional retail business, the largest number of outlets in the industry, the dealer team is active and enterprising, and the company grasps the industry trend and vigorously develops the assembly mode and bulk business. At present, the whole assembly has entered the fast lane of development, as of November 5, the company's assembly order performance of 2 billion yuan, +104% year-on-year, leading the industry. The bulk business scale industry is in the forefront, still maintaining a steady, high ability to collect money, in the case of the industry's real estate credit risk increases, it is expected that the company will also strengthen the provision of accounts receivable, but considering the company's customer structure is scattered and good credit, the overall risk is controllable. We believe that the company has high production efficiency, strong cost control and outstanding marketing capabilities, and can continue to maintain the first-mover advantage in channel change, and achieve healthy and better development than the industry.

The basic plate of the category is stable, and the boundary expansion opens up space. In terms of cabinets, the company promotes the full kitchen customization model, maintains the steady growth of cabinets, and has a solid position as the first in the industry. Wardrobe through the whole house customization mode of development, continue to maintain a high growth, in the cabinet + accessories + door wall system of the integrated sales model, wooden doors and other accessories with the continuous improvement of the rate of income growth. The development of the whole package and bulk channels has also driven the growth of bathroom and wooden doors. At the same time, the company continues to expand categories such as metal doors and windows, decoration main and auxiliary materials, and through cooperation, the soft and home appliance brand products are incorporated into its own sales system, and the large home system is gradually taking shape. Based on the basic disk of cabinets, wardrobes and other categories, the company continues to drive the development of other categories, expand the boundaries of categories, and has a broad space for future development.

Profit Forecast and Investment Rating: We are optimistic that the company can rely on the advantages of traditional distribution channels to continue to maintain a first-mover advantage in new channels such as renovation, and continue to drive the rapid development of other categories and broaden the boundaries of categories based on the cabinet wardrobe of advantageous categories. Channel innovation and category expansion promote each other, promote the continuous growth of the company, and move towards "one unified whole house". It is estimated that the company's net profit attributable to the mother in 2021-2023 will be 2.757, 33.56 and 4.062 billion yuan, and the EPS will be 4.53, 5.51 and 6.67 yuan, respectively, and the current stock price corresponding to pees will be 32.59, 26.77 and 22.12 times, maintaining the "recommended" rating.

Risk Warning: The epidemic exceeded expectations, and raw material prices rose more than expected.

A total of 30 institutions have given ratings in the last 90 days, with 26 buy ratings and 4 overweight ratings; the average target price of institutions in the past 90 days is 181.68; the Securities Star Valuation Analysis Tool shows that the good company rating of 603833 is 4 stars, the good price rating is 3 stars, and the valuation comprehensive rating is 3.5 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)

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