The fresh air system industry is in the stage of rapid development, and the market scale of 60 billion is expected in the future: compared with the developed countries in Europe and the United States, the permeability of fresh air system in China is lower. From 2013 to 2020, the CAGR of China's new air system market was 32.3%, showing growth. Due to the stricter indoor air quality policy, the increased attention of consumers to indoor air quality after the epidemic and the rise of fine decoration channels of fresh air, the permeability of fresh air system has great potential to improve.
We expect the new wind market to exceed 60 billion yuan in 2025, with a CAGR of 27.3% in 2020-2025.
The company accurately locates the new air system track and will enjoy the rapid growth dividend of the industry in the future.
The company has a rich product line and obvious cost-effective advantages: the company is one of the few brand manufacturers in the industry that fully cover the main products in the indoor ventilation market. The company's products cover hundreds of series and thousands of models, such as fresh air system and air curtain machine, which can meet the diversified needs of customers. The company attaches importance to the diversified development of product application scenarios, and the products have a wide range of choices in air volume, size and function, and a wide range of downstream applications. Compared with other brands in the same industry, the company's Xinfeng system products have obvious cost-effective advantages. This will help the company to attract price-sensitive consumers and rapidly expand the market share of Xinfeng retail.
The terminal sales outlets covered by the company through the distribution channel are all over the major cities throughout the country, and the company continues to promote the channel sinking. The company accounts for a relatively high proportion of engineering channel income, and the brand "Green Island style" is well known in real estate enterprises, construction and installation companies. The long-term cooperative relationship between the company's dealers and downstream engineering customers will help the company to open up the semifinished housing fresh air market and the commercial fresh air market.
Raw material procurement + independent production + production automation to create cost advantages: 1) the company's scale advantage and centralized procurement improve the bargaining power of the upstream, effectively reduce the procurement cost of raw materials; 2) the company has core technology and highly independent production in the core components of new wind products such as motors, exchange cores, filters and so on. 3) the company has a modern production base, which constantly improves the automation level of each production link and reduces labor costs.
The fund-raising project will push the development of the company to a new level: after the fund-raising project reaches production, it will increase the annual production capacity of 300000 sets of new wind products and break through the capacity bottleneck. At the same time, the company will enhance its R & D capability through fund-raising projects, expand the depth and breadth of marketing channels, and improve the awareness of the Green Island style brand.
Investment suggestion: as the leader of the domestic indoor ventilation industry, the company accurately locates the fresh air system track. The company has a rich product line, leading indoor ventilation technology, extensive distribution network and efficient manufacturing capacity, and has great potential for rapid growth in the future. We estimate that the EPS of the company in 2021 and 2023 will be 1.43 1.76pm 2.04 yuan. Combined with the absolute valuation results and with reference to the comparable company valuation, we give the company a PE valuation of 35X in 2021, with a 6-month target price of 50.08 yuan per share, covering the investment rating of Buy-A for the first time.
Risk tips: the popularization rate of fresh air system is not as expected, the competition in fresh air system industry intensifies, the price of raw materials rises sharply, and the risk of distribution mode management.