The leader of vacuum cleaner hose, occupies the first place in the industry market for ten years.
Chunguang Technology is mainly engaged in the R & D, production and sales of clean electrical hoses and accessories, and is committed to providing diversified, systematic and customized integrated solutions for clean electrical manufacturers. The company's hoses and accessories are mainly used in vacuum cleaners, ironing machines, dishwashers and outdoor cleaning industrial dust removal systems, and the sales volume and market share of vacuum cleaner hoses produced in the past ten years rank first in the industry. for three consecutive years, the main economic indicators and product quality have ranked first in the plastic industry in Zhejiang Province.
With the acquisition of accelerated layout clean electrical equipment at home and abroad, the coordinated development of categories has accelerated the expansion of the whole business field of clean electrical appliances, and the company has purchased 100% equity in SUNTONE TECHNOLOGY COMPANYLIMITED in Vietnam and related business assets of Suzhou Haili Electric Appliance Co., Ltd. Among them, Vietnam SUNTONE was founded on January 14, 2020, mainly engaged in vacuum cleaner business research and development, production and sales, has formed an annual processing and assembly capacity of 1.5 million vacuum cleaners, for the United States of Vietnam supplier; Haili Electric Appliance is mainly engaged in vacuum cleaner business research and development, production and sales, the last three years production and operation is stable, and has accumulated rich high-quality customer resources.
Chunguang Technology and Haili Electric Co., Ltd. jointly invested in Suzhou Shangteng, holding 55% and 45% respectively and forming a related relationship.
The company ploughs the clean electrical hose industry for many years, through improving the production process and continuous technology accumulation and innovation, to provide customers with diversified, systematic and customized hose and accessories products, and has a long-term cooperative relationship with Dyson, Midea, Shark and other domestic and foreign brands. The company's product sales adopt the direct sales mode, and the shipment is stable in the fixed production mode. According to the 20-year annual report, the production and sales rate of all kinds of hoses is between 92% and 97%. After the company sells the hoses and accessories to its designated vacuum cleaner ODM/OEM manufacturer, the vacuum cleaner is manufactured by ODM/OEM manufacturer and sold to the vacuum cleaner brand enterprise.
The whole machine business is ready to start and is expected to grow rapidly in the future.
The domestic market for contract manufacturing of clean electrical appliances is vast, and we measure the development path of Japanese clean electrical appliances which are similar to those in China. According to the scale of contract manufacturing in the domestic market, the sales market scale of domestic vacuum cleaners / floor sweepers / floor washers in 2022 is 16.5 shock 2.65 billion yuan respectively, totaling 6.33 billion yuan. If we only consider OEM for the domestic market, assuming that Chunguang accounts for 5-10% of the domestic OEM market in 2022, the income scale of the company's OEM business in 2022 will be RMB3.2-630 million. The acquired Vietnam SUNTONE already has the annual production capacity of processing and assembling 1.5 million vacuum cleaners, assuming that the contract manufacturing price of vacuum cleaners in Vietnam is the same as that of domestic vacuum cleaners, then the production capacity of 1.5 million vacuum cleaners corresponds to at least 500 million of the whole machine OEM revenue, if the OEM business for overseas brands can be increased, the OEM business revenue scale will be even larger.
The coordinated development of new and old business can enhance the self-production rate of the whole machine parts, and is expected to improve the profit level of the whole machine OEM in the future.
Investment suggestion: Chunguang Technology is the leader of domestic clean electrical hoses and accessories industry, relying on technology and product advantages to serve B-end high-quality customers for a long time, adopting leading technology and creating scale advantages to reduce costs and increase efficiency. Through the acquisition of vacuum cleaners at home and abroad, the company is expected to have a steady growth in revenue and a good cash flow in the long term. With the steady increase in the scale of clean electrical hose business and the further release of machine production capacity, the performance is expected to grow further. Therefore, we estimate that the net profit of the company from 2021 to 2023 is 1.5 × 2.2 billion yuan, respectively, and the corresponding dynamic valuations are 21.9x, 14.5x and 11.2x, respectively. We select industry clean electrical appliances and small household appliance companies to compare based on the PE and market value of comparable companies in the industry, with reference to the industry average valuation, and considering the high growth rate of the company's OEM business revenue, we can consider appropriately raising the valuation range, so we give the company a reasonable valuation range of 20-25 times PE in 2022, corresponding to a market capitalization of 45-5.6 billion yuan in 2022. The corresponding reasonable price per share is 33.4-41.8 yuan per share. Give a "buy" rating.
Risk hints: raw material price fluctuation risk; market competition risk; alternative product risk; exchange rate risk; OEM permeability is lower than expected; there are subjective judgments and extreme values in the calculation, for reference only.