Peace viewpoint:
The concentration of 100 billion-level general lighting market is expected to accelerate: by the end of 2016, the general lighting market has exceeded 200 billion yuan, accounting for nearly 50% of LED applications, and is still expected to grow steadily in the future. However, compared with other electronics industries and foreign markets, the industry concentration has more room for improvement. We believe that the concentration of the industry may accelerate, the main reasons are as follows: 1) the integration of mergers and acquisitions in the industry is accelerated, and the international giants have withdrawn one after another; 2) the awareness of consumer upgrading is gradually strengthened, and the channel brand has become a new barrier in the industry; 3) the integration of lamps and lanterns and the design ability of brand manufacturers are highlighted; 4) with the increase in the proportion of domestic hardcover houses, high-quality enterprises will get more share.
Based on commercial lighting, improve R & D production capacity: according to Technavio research data, China's commercial lighting market was $9.02 billion in 2014, and is expected to reach $13.84 billion in 2019, with CAGR reaching 8.94%. As the leader of domestic commercial lighting, the company will continue to increase R & D investment and improve rapid response ability. The company plans to complete the expansion and upgrading project of the R & D center within three years, constantly improving the technical content of the products and the novelty and uniqueness of the design, in order to adapt to the changes in market demand. In terms of production, for large quantities of products, the company will adopt the "order production + safety inventory" mode; for small batches of products, the company will all adopt the "order production" mode (realized through OEM).
Expand household lighting, improve brand channel construction: in recent years, the company began to actively layout the household lighting market, adjusted the marketing system, and set up an independent household products business department.
The company strengthens the brand construction by designing the new VI brand logo, signing Li Chen as the brand image spokesman, building a regional exhibition center and so on. In terms of channels, the company implements the channel sinking strategy on the basis of consolidating the channels in first-and-second-tier cities, plans to add 1500 stores within three and a half years, and increases investment in e-commerce channels to form a synergy between offline experience and online consumption.
Investment strategy: Sanxiong Aurora Mobile Limited, as the leader of domestic commercial lighting, the company has begun to vigorously develop the home lighting market in recent years, which is expected to achieve home two-wheel drive and promote sustained growth in performance. We estimate that the company's revenue from 2017 to 2019 will be 22.66 pounds 2.941 billion yuan respectively, and the net profit of returning to the mother will be 256 pounds 312409 million yuan respectively. The corresponding PE will be times that of 25-20-16, and the company will be given a "recommended" rating for the first time.
