Original title: 27 days soared twice, "the whole circle of friends are camping": Mu Gaodi, can you become the king of camping? | One of the outdoor themes
After the company is listed, dividends are paid every year, and the cumulative dividend amount is close to the cumulative amount of funds raised, which is a conscientious enterprise.
Author | Tower Hill
Edit | Little white
Camping, a "niche track", has recently begun to appear frequently in the public eye.
The domestic camping industry, which has been on fire since 2020, will continue to climax in 2022: the epidemic has repeatedly, the radius of tourist travel has shrunk, and local tourism has become the main choice for weekend and holiday tourists.
Among them, park camping and outdoor sports have become the first choice for local tours.
Statistics from the Ministry of Culture and Tourism show that in 2022, during the "May Day" holiday, 160 million domestic tourists traveled nationwide, of which many characteristic exquisite camping products such as "flower viewing + camping", "caravan + camping" and "open-air concert + camping" were sought after.
"This 'May Day', I feel that the whole circle of friends is camping." Some netizens sighed like this.
In the A-share market, the outdoor goods sector has recently performed strongly, from April 6, 2022 to May 17, 2022, Mugaodi rose nearly twice in 27 trading days.
(Source: Market Capitalization App)
Double positive: the new crown epidemic + industry clearance
In the early days of China's outdoor sports development, it experienced a "blowout" development period, and the market size of the outdoor products industry grew rapidly from 300 million yuan in 2002 to 14.5 billion yuan in 2012, with a compound growth rate of about 47% in ten years.
Since 2013, the retail sales of the outdoor goods industry have continued to slow down, and the industry has entered a period of adjustment. According to data from the Outdoor Branch of the China Textile Association (COCA), in 2019, the total retail sales of outdoor products in China were 25.02 billion yuan, an increase of 0.17% year-on-year, the lowest growth rate in the industry since 2002.
(Source: Mu Gaodi 2019 Annual Report)
In the context of the continuous slowdown in the growth rate of the industry, the industry concentration continues to increase, COCA released the "China Outdoor Products 2019 Annual Market Research Report" data show that from 2016 to 2019, the proportion of brand shipments with annual shipments of more than 100 million yuan is 57.2%, 59.8%, 61.7%, and 62.6%.
The outbreak of the new crown epidemic at the end of 2019 has caused an impact on the outdoor goods industry, further accelerating the clearance of the entire industry, but at the same time bringing development opportunities, after all, it is always easier to yearn for the beauty of nature after a long period of home isolation, so there will be "camping fever" and other phenomena in these two years.
The outdoor goods industry has a big reshuffle, or is expected to go out of the bottom
On February 23, 2022, the domestic "first share of outdoor products" Pathfinder completed the acquisition of 60% of the equity of Beijing Xinneng Electronic Technology Co., Ltd. (hereinafter referred to as "Beijing Xinneng"), officially entered the chip field, and actively explored the "second growth curve".
Combined with the performance of Pathfinder over the years, it can basically be judged that the development of its main business is limited and it is urgent to find a second growth point. In fact, most domestic outdoor sports companies, including Pathfinder, before the new crown epidemic, had a bad time.
The mainland outdoor products industry generally presents a pyramidal competitive pattern, that is, the high-end market is almost monopolized by foreign first-line brands, the high-end market is mainly foreign second- and third-tier brands and a small number of domestic brands, while most domestic brands linger in the low-end market.
At present, the representative outdoor products companies listed in China: Zhejiang Yongqiang, Pathfinder, Sanfu Outdoor, Mugaodi, Zhejiang Nature.
According to the business model, it can be divided into two categories: Zhejiang Yongqiang, Zhejiang Nature, and Mugaodi are mainly exported OEM; Pathfinder and Sanfu Outdoor are mainly sold in domestic stores.
In 2021, the outdoor goods industry is more prosperous, taking Pathfinder, Mugaodi, Zhejiang Yongqiang and Zhejiang Nature as an example, its revenue growth rate has hit a new high in the past five years, of which 2020 is the first year of "camping fever", and the revenue growth rate of Mugaodi is leading among the five listed companies.
In the first quarter of 2022, the growth rate of natural revenue of Mugaodi and Zhejiang remained above 40%, while the revenue growth rate of Pathfinder and Zhejiang Yongqiang was less than 20%, and there was a certain degree of differentiation in the industry.
(Source: Flush iFinD)
From the financial data of 2021, the industry has indeed shown signs of improvement, in the first quarter of 2022, some listed companies still continued to grow high, but there are also some listed companies in the industry revenue growth rate declined, whether the outdoor products industry can go out of the bottom still needs to pay attention to the sustainability of listed companies' performance.
Can Mu Gaodi become the most beautiful boy in the outdoors?
In outdoor activities with low thresholds, camping is the main activity direction and the first business direction for relevant listed companies to benefit.
The main configuration of camping is the tent and related equipment.
From the perspective of the above five listed companies, the listed companies with tents and related equipment as the main business are only Mugaodi, whose revenue accounts for about 80%, and the main business has been relatively stable in the past decade.
Makigaodi Outdoor Products Co., Ltd., founded on October 31, 2006, hereinafter referred to as Makigaodi or the company.
(Source: Flush iFinD)
From a business point of view, simply put, it is Mu Gaodi standing on the outlet of camping, of course, this is inseparable from its adherence to the main business for many years.
At present, the company operates oem/ODM business and independent brand business at the same time. Since its establishment, the company has been focusing on the research and development, design, production and sales of camping tent products, providing development, design and manufacturing services for high-quality tent products for customers around the world. More than 80% of the company's camping tent products are exported to European and southern hemisphere countries.
In addition, the company actively carries out strategic layout in the world, and currently has two overseas production bases in Vietnam and Bangladesh.
Before 2020, the company's revenue and attributable net profit did not fluctuate much, and it remained profitable in the past six years, with revenue of 923 million yuan in 2021, a record high.
The company's revenue and attributable net profit growth rate in 2021 hit a record high, and the growth rate of attributable net profit far exceeded the revenue growth rate, and the quality of growth was higher; in the first quarter of 2022, the high growth trend continued, with a net profit growth rate of 73.38% and a revenue growth rate of 56.06%, which was at a high level in the industry.
(Source: Flush iFinD)
The company's free cash flow in 2021 turned negative and experienced a sharp decline, according to the annual report, mainly due to the substantial increase in purchase payments, presumably due to an increase in orders. The 2022Q1 free cash flow continues to decline, presumably due to a continued increase in orders. In addition, spring and summer are the peak season for outdoor equipment products.
The company's inventory in 2021 increased significantly, according to the annual report, mainly due to the increase in the market stocking of independent brand equipment and the increase in orders in hand in the OEM/ODM business in 2022 compared with the same period of the previous year, which basically can verify the above conclusions.
In 2021, the proportion of foreign revenue has decreased significantly, and domestic revenue has increased significantly, accounting for more than 30% of domestic sales; at the same time, the gross profit margin of domestic sales has begun to rise, while the gross profit margin of foreign sales has shown a downward trend; from the perspective of gross profit margin and revenue proportion, domestic sales in 2021 have seen a trend of rising volume and price, which seems to be a turning point.
The decline in gross profit margin in 2017 was mainly caused by the increase in costs caused by the insignificant economy of scale of new production capacity; the decline in gross profit margin in 2018 was mainly caused by the insignificant economy of scale of new production capacity, fluctuations in RMB exchange rates and the increase in raw material costs; the decline in gross profit margin in 2020 was mainly caused by the impact of the new accounting standards on freight included in operating costs.
In recent years, the company's net profit margin has been relatively stable.
In summary, the main factors affecting the company's gross profit margin include: new production capacity, RMB exchange rate fluctuations, upstream raw material price fluctuations, etc.
From foreign OEM to domestic brands
Although the company's products are mainly export OEM, the proportion of domestic business in 2021 has increased significantly, domestic sales have grown strongly, and the core of the company's performance growth has shifted to domestic business, that is, the growth of independent brands.
In the context of the continuous improvement of industry concentration, the focus of competition has changed from output competition, price competition and channel competition to brand competition, so the development of the company's own brands is worth paying close attention to.
In terms of independent brands, in 2018, the company divided its own brand "Mobi Garden" into the main brand of Damu (Shanbiao) and the sub-brand of Komaki (Deer Label) and operated by different business units.
(Source: Company's official website)
The Obaki brand is oriented to professional outdoor people, focusing on outdoor camping equipment series products; Komaki brand is oriented to pan-outdoor people, focusing on high-performance travel clothing products; thus forming brand recognition in different market segments, and brand positioning is clear.
The company's own brand business revenue will not fluctuate much overall before 2021, and the revenue growth rate in 2021 will reach 90%, a record high. The growth of the self-owned brand business is strong.
In terms of brand positioning, Makigaodi's brand positioning is "exquisite camping expert", and the product line covers the middle and high-end levels, and the price ranges from less than 200 yuan to more than 5,000 yuan. Judging from the tents with the highest sales volume in the three official flagship stores of Taobao, Mugaodi, Pathfinder and Decathlon, the pricing of Mugaodi is the median level, and the sales volume is basically leading.
(Source: Taobao)
In general, from the perspective of independent brands, it is in line with the preferences of contemporary young people, while the company attaches importance to interest in e-commerce and community marketing, and its positioning is relatively accurate.
In terms of industrial chain, the upstream, middle and downstream of the outdoor products industry are as follows:
(Source: Tianfeng Securities Research Institute)
The upstream of the outdoor products industry is the textile industry, the chemical fiber industry and the packaging material manufacturing industry, all of which are traditional industries, with sufficient production capacity and stable product supply, and the upstream industry is basically in a state of perfect competition, which is conducive to improving the company's bargaining power to control procurement costs.
The main raw material used by the company to produce tent products is polyester fabric, other raw materials also include base materials, accessories, support rods, etc., polyester fabric and mesh main materials for polyester filament, in 2021 the company's top five suppliers procurement accounted for 34.02% of the total annual procurement, upstream concentration is not high.
Taking polyester POY as an example, its price is at the historical median level, which does not pose too much pressure on the cost side, but if its price fluctuates sharply, it will still have an impact on the cost side.
(Source: Flush iFinD)
The main customers of OEM/ODM business foundry enterprises of mainland outdoor products include:
(1) Overseas outdoor products brand owners, such as Columbia, The North Face, etc.;
(2) Sporting goods professional retailers, such as Decathlon, etc.;
(3) Comprehensive general retailers, such as Carrefour, Walmart, etc.
In 2021, the company's top five customer sales accounted for 52.15% of the total annual sales; of which the largest customer was DESIPRO PTE, LTD, accounting for 34.3% of sales. High customer concentration.
In addition, the industry module of the camping economy includes camping in addition to equipment. In terms of camps, Haikou Mugaodi, a subsidiary established in 2021, has laid out in the camp field.
On November 26, 2021, Haikou Mugaodi increased its capital by 10 million yuan to Wuhan Da hot wilderness technology co., LTD. to obtain 10% equity. Da hot wilderness is the leading high-end wild luxury camping operator in China.
On the whole, mugaodi through the binding of outdoor international factories, customer concentration is high, although the bargaining power is restricted, but can indirectly benefit from the growth of overseas markets. Recently, the RMB exchange rate has been retraced, which is conducive to the company's export business. At the same time, the company gradually builds its own brand, which can also fully benefit from the growth of the domestic market.
From the perspective of main business, MuGaodi is undoubtedly the first listed company to benefit from the outdoor industry, but whether the company can win in the current increasingly competitive industry needs to continue to observe the performance of its own brand.
It is worth mentioning that the company was listed on the main board of the Shanghai Stock Exchange on March 7, 2017, in addition to the initial public offering, there is no follow-up fundraising behavior, the cumulative amount of funds raised is 273 million, the company dividends are paid every year after listing, the cumulative dividend amount is 210 million, and the cumulative dividend amount is close to the cumulative amount of funds raised, which is a conscientious enterprise.
In addition, there have been no irregularities since the company went public.
However, it should be noted that after the company's stock price soared, on April 30, 2022, the company issued a reduction announcement, and the company's controlling shareholder, Ningbo Damu Investment Co., Ltd., the company's major shareholder and controlling shareholder, Zhejiang Jiatuo Investment Management Co., Ltd., and three senior executives of the company, planned to reduce their holdings in the company's shares acquired before the IPO.
Is "camping fever" sustainable?
In Europe and the United States and other countries, camping is a living habit, and even a representative of outdoor culture; but in the current country, camping is more of a phenomenon, and there is still great uncertainty about the development of culture or living habits.
Overall, the domestic camping industry is still in the early stages of development. For the high-end camping consumption model with the nature of overnight accommodation, it also needs the support of mature and approval camping bases, and the technical requirements for equipment such as tents are more complex.
The main factor that has spawned the "camping fever" in the past two years is the epidemic, and the strict domestic epidemic prevention policy has greatly inhibited people's travel needs.
That is to say, the domestic "camping fever" is generated in a special context, so once the epidemic is controlled, or there is a major adjustment in the epidemic prevention policy, the specific background of camping fever will no longer exist, and will the demand for camping be reduced or replaced by other activities?
What has changed is the way people travel, and what has not changed is people's travel needs. Whether the "camping fever" can last is a question.
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