IPO purchase proposal:
According to the Saino report, the company is the largest mobile communications chain store and the third largest mobile phone retailer in China by sales in 2013. The company's main business is the sales and distribution of mobile communication equipment and accessories and the provision of value-added services. The company has established a long-term and close strategic partnership with the three major mobile operators in China, and has developed a large number of customers for the operators, thus earning a commission, so the company has achieved rapid growth in size. The company currently sells a variety of international brands and domestic brand mobile phones for customers. At the same time, the company also provides personalized value-added services, which mainly include software and mobile application packages and mobile phone configuration services. The company believes that the core competitiveness of the company is to strive for many years to meet customer preferences and needs, provide customers with high-quality shopping experience, make the company stand out from its competitors, and constantly enhance the influence of the brand.
According to the analysis of the company's sales model, a large part of the sales are generated through the O2O platform, which are (1) offline channels, including 1512 stores (including 956 independent stores and 556 franchise stores) in 21 provinces and 4 municipalities in China, some wholesale distribution networks and 1500 resident outlets in operator stores. In terms of the number of retail stores, the company has the largest physical retail and distribution network in the China Mobile Limited communication chain; (2) online channels, mainly including e-commerce sales platform and other virtual platforms. Such as the company's own Internet platform (www.dixintong.com) and third-party Internet platforms such as Tmall, Amazon.Com Inc and No.1 store, other virtual platforms include TV sales channels and credit card online stores. Reviewing the company's previous performance, from 2011 to 2013, the three-year revenue compound growth rate was 40.2%, and the net profit annual compound growth rate was 11.3%.
From a separate business point of view, in fiscal year 2013, the company's revenue from sales of mobile communication equipment and accessories was 12.186 billion yuan, accounting for 95.1% of the total revenue; revenue from providing services to mobile operators (sales packages received commission) was 496 million yuan, accounting for 3.9% of the total revenue. The income from other services is 129 million yuan, accounting for 1% of the total income, and the income structure has remained basically stable in the past three years. According to the composition of gross profit, the three businesses account for 68.6%, 24.2% and 7.2%, respectively.
From the point of view of valuation, according to the median IPO price, the PE of EPS in 2013 is about 12.4 times, and the annual compound growth is 11.1 times PE in 2014, so the valuation is reasonable. We believe that the company's past growth is mainly due to the rapid popularity of smartphones in China, but at present, smartphone penetration has reached a high level, and the company's future growth has a lot to do with the continued rapid growth of smart device sales. If the company continues to drive revenue growth through the mode of store expansion in the future, if there is a decline in the growth rate of the industry, it will have a negative impact on the company's profit margin; in addition, the start of virtual operators may play a leading role in the service business of operators with higher gross margins, so it is recommended to apply carefully.
