Basic events
Company announcement: investment of 2.496 billion yuan in Hangzhou Jiangdong new 1 million sets of soft home and supporting projects, is expected to start construction in 22Q1, construction period of 3 years, completion and production at the end of 23 years, after fully reaching the steel can contribute 4.35 billion yuan, investment recovery period of 6.24 years.
Investment essentials
The new production capacity focuses on high-end series products and strengthens the product matrix
According to our communication. Of the new 1 million units, about 300,000 units were transferred to the Xiasha base, and the actual net increase in production capacity was about 700,000 units. After fully achieving the program, the total production capacity of the company's domestic factories of soft home furnishing will reach about 5 million sets. This project mainly focuses on the production of high-end upholstered sofas, high-end functional sofas, high-end mattresses, intelligent control system function iron frames, motors and supporting, intelligent system supporting and other furniture industry chain products, and gradually penetrates high-end series products and broadens the product matrix:
(1) Sofa category: In terms of soft sofas, we will continue to enrich product SKUs and launch a series of new products to accurately match customer needs at all levels and enhance market share; in terms of functional sofas, the self-supply rate of iron frames & motors is expected to increase after the completion of the project, and the integration of the supply chain will bring cost advantages.
(2) Mattress category: In the past, the product was mainly cost-effective, and now it is fully upgrading the product force, emphasizing deep sleep, and becoming the exclusive supplier of the 2022 Hangzhou Asian Games, strengthening the professional ability and brand recognition in the field of mattresses. With the high-end mattress products and accessories successively put into production, it is optimistic that the company's mattress brand positioning will move upwards.
Create a smart digital factory that improves supply efficiency and customer satisfaction
Relying on new technologies such as big data, Internet of Things, cloud computing, AND/VI, the new project will build an intelligent digital factory, build an industrial 4.0-level advanced mattress production line, and realize the intelligent control of the whole process of home production, which is expected to optimize the cost structure, improve production & supply efficiency, shorten the delivery cycle, and effectively improve customer satisfaction. In addition, the company continues to streamline SKUs and unify dimensional specifications at the supply chain end. In 2018, it carried out logistics cooperation with Suning, and in 19 years, it began to establish a central warehouse to achieve unified distribution and reduce the inventory pressure of dealers, and at the end of 20 years, huawei joined hands to open up the "end-to-end" process in the supply chain. The multi-dimensional empowerment of regional retail operation companies in the channel end in marketing, training and store opening, and the coverage rate of information stores reached 100%, which will effectively improve the efficiency of channels and accumulate the advantages of competition in the second half
Earnings forecasts and valuations
The integration effect of Gujia categories is outstanding, channel management is refined & retail, supply chain efficiency continues to improve, and new production capacity lays the foundation for future growth. It is expected that in 21-23 years, the company will achieve revenue of 17.349/217.3/26.815 billion yuan, an increase of 36.97%/25.25%/23.4% year-on-year; net profit attributable to the mother of 16.84/21.05/2.612 billion yuan, an increase of 99.18%/25%/24.07% year-on-year. The current market capitalization corresponds to 24.15X/ 19.32X/ 15.58X pee in 21-23 years, respectively, maintaining a "Buy" rating.
Risk Warning
The construction of channels did not meet expectations, and the regulation of real estate exceeded expectations
Chief Analyst of Light Industry Manufacturing Industry
Master of Engineering, Columbia University, USA. From April 2015 to March 2017, he worked in the research department of China Galaxy Securities, where he was engaged in the research of agriculture, forestry, animal husbandry and fishery industry, and joined soochow Securities Research Institute in April 2017 to engage in light industry manufacturing industry research, and has served as the chief of light industry manufacturing industry since 2018. In 2017, It ranked 5th in the manufacturing industry of New Fortune Light Industry and 3rd place in 2019. In July 2020, he joined the Zheshang Securities Research Institute.
Mobile/WeChat: 18811064824
Ma Li Deputy Director of Zheshang Securities, Head of Large Consumption, Chief Analyst of Textile and Apparel Industry
He holds a bachelor's degree from Nanjing University and a ph.D. in economics from the Chinese Academy of Social Sciences, and currently works at the Zhejiang Securities Research Institute, and has worked for the China Textile Industry Association, China Galaxy Securities Research Department, and soochow Securities Research Institute. In 2019, New Fortune Light Industry and Textile and Garment ranked 3rd, Crystal Ball Textile and Garment Industry Ranked 1st; 2018 Textile and Garment Industry Crystal Ball Ranked 1st; 2016-2017 New Fortune Textile and Garment Industry Ranked 1st; 2015 New Fortune Textile and Garment Industry Ranked 2nd; 2014 New Fortune Textile and Garment Industry Ranked 4th; 2013 New Fortune Textile and Garment Industry Ranked 2nd; 2012 New Fortune Textile and Garment Industry Ranked 4th
Mobile/WeChat: 15601975988
Fu Jiacheng is a researcher in the light industry manufacturing industry
Bachelor of Investment, Master of Central University of Finance and Economics, worked at Soochow Securities Research Institute from July 2019 to May 2020, covering the light industry manufacturing industry, and joined Zhejiang Securities Research Institute in June 2020.
Shuyan Yang, researcher in the light industry manufacturing industry
With a bachelor's degree from Shanghai Jiao Tong University and a master's degree from the Hong Kong University of Science and Technology, he joined the Zheshang Securities Research Institute in March 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 13611883185
Dushan, researcher of light industry manufacturing industry
With a bachelor's degree from Zhejiang University, a master's degree from the University of Illinois and the University of Chinese of Hong Kong, Shenzhen, he joined the Zheshang Securities Research Institute in May 2021, covering the light industry manufacturing industry.
Mobile/WeChat: 15306560432
Disclaimer: The above content is for the reference of institutional investors only and does not constitute investment advice, and the company's value judgment shall be subject to the official report.
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