On April 12, Hongchang Technology's 20cm large size rose to the limit. The home appliance sector rose sharply in early trading, Chunlan shares, Xueqi Electric, Shuai Feng Electric, Qijing Machinery, Delmar, Ousheng Electric, Yitian Intelligence, etc. rose to the top.
On the news side, on April 10, Sheng Qiuping, Vice Minister of Commerce, presided over the promotion of consumer goods trade-in action work promotion meeting, the meeting emphasized that it is necessary to play a good role in the departmental policy combination, enrich the policy package, strengthen digital empowerment, and further stimulate the consumption potential of automobiles, home appliances and home decoration, kitchen and bathroom, and cultivate new consumption growth points.
The agency believes that most of the targets in the home appliance sector are still at the relative bottom of historical valuations. From the perspective of the stock and bond yield model, the Shenwan Household Appliance Index is currently at the level of about the three-year average of the stock and bond yield difference.
Introduction and main business of Hongchang Technology
The company's main business is the research and development, production and sales of fluid solenoid valves, sensors and other electrical accessories. The company's main products include fluid solenoid valves, modular components and water level sensors, which are important components for the production of various household appliances. The company's solenoid valve products can control the inlet and outlet of fluid and flow through electromagnetic drive, and are widely used in washing machines, water purifiers, intelligent toilets, dishwashers and other home appliances, kitchen and bathroom fields. In the course of more than 20 years of development, the company has been continuously engaged in product innovation and technology accumulation along with the development of domestic washing machines and other household appliance industries, and has gradually developed into a professional manufacturer of magnetic induction control products with leading production scale, rich product types and strong R&D strength.
The concept of Hongchang Technology stock
Home appliance industry, Zhejiang plate, specialized, special and new, GEM comprehensive, margin financing and securities lending, institutional heavy positions, convertible bond targets, sensors, micro-cap stocks.
What is the status of Hongchang Technology in the industry?
What is the basic situation of stock issuance?
The total share capital of Hongchang Technology is 80,003,700 shares, of which 24,647,700 A shares are in circulation. As of April 12, the total market capitalization was 2,148.9 million, the circulating market value was 662.0 million yuan, and the price-to-earnings ratio was 27.08. The number of shareholders is 94.45 million. The largest shareholder is Zhejiang Hongchang Holdings Co., Ltd., with the top ten shareholders accounting for 73% of the shares.
What about stock financials?
According to the third quarter report of 2023, Hongchang Technology's total revenue was 608 million yuan, and the net profit attributable to the parent company was 57.1192 million yuan, with a year-on-year increase of 7.19% in total revenue and a year-on-year increase of 26.81% in attributable net profit.
As of June 30, 2023, in terms of products, the operating income of smart home appliance components was 362 million, and the revenue ratio was 99.08%.
Executive Profile:
Lu Baohong: male, born in December 1954, Chinese nationality, no right of permanent residence abroad, junior high school education. From March 1972 to February 1989, he successively served as apprentice, workshop director and deputy director of Lanxi Agricultural Machinery Factory/Lanxi Boiler Parts Factory, from March 1989 to December 1995, he served as the director of Lanxi Lanjiang Wire Drawing Factory/Lanxi Solenoid Valve Factory, from May 1996 to April 2019, he served as an executive director of Jinhua Hongchang Electric Appliance Co., Ltd., from May 2013 to March 2020, and since May 2019, he has served as the chairman of the company. He is currently the chairman of the company, the executive director and manager of Hongchang Holdings, the executive director of Jinhua Hongchi, the executive director and manager of Lanxi Xiecheng, the executive partner of Jinhua Honghe, the executive partner of Jinhua Hongsheng, and the supervisor of Lanxi Zhongyuan.
Tianfeng Securities: Focus on long-term stability and explore structural increments
The relative return of white electricity in the 24Q1 household appliance sector is the most obvious, and the structure of the rest of the sectors is obvious, and most of the targets are still at the relative bottom of the historical valuation. From the perspective of the stock and bond yield model, the Shenwan Household Appliance Index is currently at the level of about the three-year average of the stock and bond yield difference. In terms of domestic sales, the domestic sales and shipments of household air conditioners from January to February were 13.39 million units, with a growth rate exceeding expectations and obvious resilience under a high base; In terms of exports, 24M1-M2 benefited from the replenishment of Europe and the United States, and the improvement of demand led to the repair of exports, and the overall stability of real estate in North America.
White electricity: domestic retail + domestic and foreign sales replenishment, driven by good growth, this year, domestic and foreign retail, shipping have shown a good prosperity. In terms of domestic sales, the current inventory pressure of the air conditioning industry is small, and if Q2 ushers in a differentiated market, the leader is expected to ensure business stability through policy adjustment. Pay attention to the potential impact of the trade-in policy, and the annualized scale of the renewal demand gap accounts for more than 40%, and the implementation of the policy is expected to significantly boost domestic demand. In terms of export sales, the sales scale of the home appliance industry in Europe and the United States in 22 years was twice that of Chinese mainland, and the sales of home appliance industry in other emerging regions were 1.5 times that of Chinese mainland. On the cost side, based on a good competitive pattern, the impact of raw material price increases on the white power industry is expected to be controllable, and it is expected to rely on price increase + product structure upgrade to effectively transmit.
Small household appliances: export sales are more prosperous than domestic sales, overseas product structure upgrading drives industry growth in terms of domestic sales, domestic optional consumption is still under pressure, some categories have an improvement trend in March, and domestic price band competition is still fierce. In terms of export sales, export sales have shown high growth in 23 years, and the export boom has been improved by low base and replenishment demand, and the all-round products of domestic brands have entered the market in overseas markets since 23 years, driving the upgrading of the product structure in overseas markets, and the rise of emerging channels such as Temu and Tik Tok overseas has also provided more possibilities for brands to go overseas. We believe that in the follow-up overseas market, the power of private brand products is king, the sweeper track realizes the technology leadership of domestic brands, and domestic brands have higher profits to go overseas.
In the past three years, the global black electricity market has been affected by factors such as the epidemic, high inflation, and content channel diversion, and the market capacity has shrunk, but the sales scale has basically stabilized after the adjustment. There are still bright spots in the structure, and the sales of products represented by OLED, Mini LED, quantum dots, and laser TVs have achieved rapid expansion, and the trend of large size continues. In the field of parts/civil electricians, benefiting from the downstream prosperity, it is expected that the Q1 parts sector is expected to achieve growth.
Kitchen appliances: Smoke stoves are growing steadily, and the performance of emerging categories under pressure real estate data is weak, and the terminal sales of kitchen appliances on the kitchen line continue to be flat, and the structure of the traditional split type is growing steadily, the integrated stove is under pressure, and the performance of kitchen appliances for dishwashers, all-in-one machines and other products is flat; The follow-up real estate policy will be further relaxed, and smoke stoves may be included in the scope of the trade-in policy, which may be conducive to the improvement of industry demand.
Risk Warning:
The calculation process has a certain degree of subjectivity, the risk of raw material price fluctuations, the risk of real estate market fluctuations, and the risk of macroeconomic fluctuations.
Source:
Tianfeng Securities-Household Appliances Industry Household Appliance Strategy in the Second Quarter of 24 Years: Focus on Long-term Robustness and Tap Structural Increment-20240411
Investment advisory support: Yu Xiaoming Practicing certificate number: A0680622030012
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