Main points of investment:
Established state-owned enterprises, product innovation: the company's first listed food and beverage company, in the past few years to provide large tea products enterprises with tea powder and other raw materials as the main business. The profits of the main business are thin, and due to the lack of downstream demand for tea products, income has declined significantly. Taking advantage of its own tea base, the company actively develops end products, creates three categories of Xingjiuyan tea, Jufangyong and Jiuqu Hongmei, and uses the channel mode of combining online and offline to open up a new world.
The tea products industry has a large space and needs to be integrated: China is a large tea-producing country, and the tea output has maintained a steady growth. In 2014, the size of the refined tea processing industry was 166.91 billion, an increase of 14.79% over the same period last year, and will maintain more than double-digit growth in the next few years. Tea products in China have a long history, but there are some problems such as price system and category confusion, and the degree of market concentration has not been high. As the only listed company of tea products, the company is expected to become an integrator, and is committed to standardizing tea products and striving to become the "Starbucks Corp" of the tea industry.
The three major marketing platforms have gradually landed: the company has created three major tea marketing platforms: iTeali fe Fuhaitang, Teabank Shenbao Tea Company and Pu'er Tea Trading Center. The functions of the three platforms are different, aiming at different types of consumer groups. ITeali fe Fuhaitang aims at young consumers, and the scented tea developed by Fuhaitang is beautifully packaged and loved by consumers. ITeali fe operates in the situation of stores, combined with online APP, to form an O2O sales model of online and offline interactive marketing. Products and marketing are highly competitive and need to be cultivated and mature, and there is a broad space for expansion in different places.
It is estimated that in 2015-2017, the company's EPS is 0.06,0.07 and 0.09 yuan respectively, and the YOY is 24%, 25% and 31% respectively. The company is the only listed company with tea products, and there is no comparable target. The company's traditional business encountered bottlenecks, the active transformation of its own resources, the development of its own products and the creation of itealife stores have a novel model and strong competitiveness. Due to the limitations of the state-owned system, there is a lack of motivation for substantial management reform. If there is a breakthrough in the reform of state-owned enterprises, the company has considerable room for development. According to the content of the core hypothesis, the valuation space of the company can reach about 8 billion yuan in the next 3-5 years. The "overweight" rating is given for the first time.
Risk tips: food safety problems, low expectations of corporate mechanism reform, lack of management motivation lead to low expectations of business transformation, and so on.
