The leader of home appliance industry, multimedia business lays a solid foundation.
The company was founded in 1988 and listed on the Hong Kong main board in 2000. It has been rooted in the home appliance industry for 34 years. In 2021, the income / return net profit is 509.3 million yuan, and CAGR 3 percent, 9 percent, 34%. From a business-by-business point of view, multimedia services laid the foundation of the business, with revenue of 27.37 billion yuan (CAGR 212.8%) in 2021, and the proportion of revenue remained at more than 50%. New energy business has become a new momentum of growth, and the company began to deploy the household photovoltaic market in 2020, with revenue of 4.1 billion yuan in 2021, + 3843% compared with the same period last year.
Cut into the household photovoltaic high prosperity track and start the second growth curve.
Low-cost green funds enter the local household market, the flexibility of private enterprises complements the middle link of "capital-farmers", the business model runs well, and the household distributed photovoltaic market has entered a high-speed development stage of "1murn". According to the proportion of 20% installation, we estimate that the installable space of household photovoltaic in China is as high as 329GW, nearly 8 times the total installed capacity at the end of 2021.
Relying on the household appliance business mature sinking market dealers to build and management system, the company entered the household photovoltaic market in 2020, superimposed brand empowerment, and joined hands with Huaxia Golden Rent. By the end of 2022H1, more than 100,000 household photovoltaic power stations had been built and operated, making it one of the leaders in the industry. In addition, the company opens a new mode of operating leasing, reducing the debt pressure on farmers, and the growth of household photovoltaic business is expected to further accelerate, opening the second growth curve for the company.
With the transformation and upgrading of multimedia services, the strategic advantage of "5Gateway AI+ Terminal" highlights the smart TV: high-end strategy to promote and build a growth base. With the decline of population and real estate dividends, China's television industry has entered the stock market. With the upgrading of consumption, personalization and high-end have become a new momentum for the growth of the TV industry. Skyworth TV has a market share of 14% in the domestic market in 2021, ranking second in the industry. It adheres to the strategy of "5Gateway AI + Terminal", grasps the tide of high-end TV, leads the trend of TV OLED, and ranks first in the market share of domestic brands in 8000 + OLED segments, driving the company's average unit price of smart TV to increase by more than 20% in 2021 compared with the same period last year. We believe that with the continuous promotion of the high-end strategy, the company's smart TV business is expected to build the foundation of the company's growth.
Cool open technology: focus on the blue ocean of OTT marketing, with a valuation of nearly 10 billion yuan, and plan to spin off and go public independently. PC+ mobile traffic dividend peaked, OTT marketing opened a new blue ocean, Gouzheng Technology predicted that the market size of OTT in 2025 is expected to reach 75.7 billion yuan, CAGR 430%. Kukai Technology has been ploughing the OTT industry for 8 years, and its market share has exceeded 30%. It has introduced Internet giants such as iQIYI, Inc., Tencent and Baidu, Inc. to inject capital, strengthen the advantage of content ecology and recommendation algorithm, and gradually break away from the limitations of brand and large screen. Transform into a multi-screen terminal service provider.
In addition, Kukai Technology has conducted a mentoring record in Shenzhen Securities Regulatory Bureau in 2021, and is expected to obtain further capital support through independent listing in the future, contributing greater value to the company.
Profit Forecast and Investment rating
As a leader in the home appliance industry, the company actively arranges new energy business and opens up room for growth. We expect the company to achieve a net profit of 16.68,21.03 and 2.5 billion yuan from 2022 to 2024, which is + 2.1%, + 26.1% and + 18.9% respectively compared with the same period last year, corresponding to a PE of 4.7,3.7,3.1 times. Based on the segment valuation method, we estimate that the total market capitalization of the company is HK $17.2 billion, corresponding to a target price of HK $6.55 per share, with a "buy" investment rating for the first time.
Risk hints: repeated global epidemics, sharp increases in raw material prices, a sharp decline in industry demand, intensified competition, less-than-expected new business development, less-than-expected overseas market expansion, differences in valuation systems in different markets, Kukai Technology and Skyworth are at risk of suspension, suspension and cancellation.