Investment logic
The company takes sofas and cabinets as its core business: at present, the company's leading products are "Asia Zhen", "Asia Zhen Livia" and "Asia Zhen Georgia" brand series of European-style furniture. In recent years, revenue has maintained a steady rise, and the company's overall gross profit margin has remained at a high level with a slight increase.
Internal and external repair, furniture industry or welcome double-drive era: the company's furniture manufacturing industry, at this stage is in a steady growth stage. According to the relationship between the income of residents in developed countries and the market demand of furniture industry, it is possible to increase the demand of domestic furniture market. In addition, the per capita furniture consumption in China is only 40 US dollars, which is lower than that of developed countries. Therefore, the domestic furniture market has sufficient potential, or furniture enterprises focus on key points. In terms of exports, the decline in the cumulative growth rate of furniture exports in the first 10 months was significantly alleviated. At present, the RMB has entered the depreciation cycle again, and the furniture export may be warmed up.
Consumption upgrading promotes the transformation of the industry, and the rise of the middle class boosts the demand for European-style furniture: at present, China is experiencing the third consumption upgrade, consumers pay more attention to environmental protection and personalization of furniture products. In this context, furniture enterprises began to change, on the one hand to expand the influence of the brand. On the other hand, make every effort to improve their own production capacity and production technology. At the same time, the use of green materials to enhance the environmental protection properties of furniture products. Companies realize the online and offline interaction mode by opening stores quickly, creating online transactions and designing platforms.
In the process of industry transformation, small and medium-sized furniture enterprises with shortage of resources may be eliminated, and the industry concentration is expected to be improved. As an important category of furniture products, European furniture is deeply loved by middle-and high-income people because of its outstanding design, well-made, and high added value. According to the survey data, China's rich and middle-class groups have a large base and a clear growth. Therefore, the future demand for European-style furniture will also be accompanied by the increase in wealth and middle class. And the continuous improvement of the environmental protection attribute of European-style furniture in the future, as well as the more fashionable and younger design style, will also be possible to expand potential consumer groups.
The furniture industry is growing steadily, and the prospect of European furniture is promising: during the National Day holiday this year, the real estate industry ushered in regulation and control, and the property market began to cool down. However, as a real estate post-cycle industry, the impact of regulation on the furniture industry still needs transmission time, which will not appear in the short term. On the other hand, the market demand of the furniture industry has changed to the field of "second-hand housing" and new housing, and there is still sufficient market demand in the industry for a long time. In addition, the increase in the logarithm of marriage registration extends the potential demand of the industry, and the promotion of urbanization will also indirectly give rise to new market demand.
The company has outstanding brand advantages, exquisite manufacturing technology and extensive channels. Yazhen home has won many important awards in the domestic furniture industry, and appeared on the international "stage" several times, with high brand awareness. At present, the company is developing overseas markets in stages. With accurate product positioning, the company fully covers the middle and high-end European furniture market. The company relies on the "mechanical + manual" manufacturing mode, which not only ensures the uniqueness of the products, but also greatly improves the added value. In terms of channel promotion, the company has adopted a "point-to-point" strategy. Under the premise of controlling the cost of sales, maximize the brand influence and channel coverage. At present, the company has covered more than 80 cities and opened more than 170 stores. In the future, the company hopes to achieve sales network encryption with the help of the capital market, and create an information-based furniture production and sales model.
Valuation and investment advice
We predict that the fully diluted EPS of the company from 2016 to 2018 will be 0.28 0.34 Universe 0.45 yuan per share respectively.
The company is a leading brand of European-style furniture. After reaching production, the IPO project will greatly expand the company's production capacity and further consolidate its competitive advantage. The company's valuation should refer to listed household leading companies. We give the company 40 times PE in 2017, corresponding to a target price of 13.5 yuan per share.
Risk.
The price of raw materials fluctuated upstream; the transaction volume of new and second-hand houses decreased significantly; the production mode led to the extension of the construction period; and the construction and production progress of IPO fund-raising projects fell short of expectations.