Event: the company announced that the company signed a cooperation agreement with Israel's "O8 ISRAELLTD" company and the Netherlands's "Umee" company, which will be responsible for the brand promotion and sales of these two brands' full range of washing and care products in China.
Strengthen investment cooperation and enhance the one-stop shopping experience for infants and young children. The company continues to promote investment cooperation with global well-known brands. The partner O8 ISRAELLTD has strong technical advantages in the functional research and development of maternal and child care products, especially in the preparation and application of natural functional raw materials such as Dunaliella Salina originating from the Dead Sea, and is the first patent owner in the world to apply Dunaliella Salina from the Dead Sea to maternal and child care products. Right ViewLimited has unique advantages in the design, research and development of milk bottles and nursing products, especially in the iterative development of anti-flatulence and other functions of the bottle series. It is the Dutch brand "Umee" of infant feeding products.
The owner of brand, trademark and patent. In September 2018, the company transferred 100% equity of Ningbo Yunqin held by overseas enterprise Dehao International with RMB 78 million. Furthermore, it indirectly holds 10% equity in each of the three target companies, namely, Shanghai BABA Baby Baby products Co., Ltd., Little White Bear (Shanghai) Maternal and Child products Co., Ltd., and Shanghai Shangling Network Technology Co., Ltd. The "Little White Bear" brand is a well-known brand in the maternal and infant electrical appliance market, and the company's formal entry into the maternal and infant electrical appliance market can not only enrich the company's existing product categories and cultivate new profit growth points of the company. moreover, it is expected to enhance the one-stop shopping experience and brand strength, adding to the strategy of building the mother and child group.
The main business remains sound, and the performance continues to grow. As one of the leading brands of mother and child in China, the company has been involved in the mother and child industry for 30 years. It has three independent brands, namely, the rabbi of medium-and high-end brands, the next generation of mid-range brands and Baby rabbi, with differential positioning. Focus on maternal and infant consumer goods for infants and young children. As of 18H1, there are more than 1300 offline outlets, with online business covering Taobao, Tmall, JD.com, Vipshop Holdings Limited, NetEase, Inc koala, SUNING and other e-commerce platforms, and the sales network covers the domestic market in China. In the first three quarters of 2018, the company achieved revenue of 320 million yuan, an increase of 11.6% over the same period last year, and a net profit of 60.193 million, an increase of 9.3% over the same period last year.
18H1 maternal and infant cotton products account for 45.3% of the company's overall sales revenue, which is the company's main source of income; baby clothing accounts for 32.2%, and other maternal and infant products account for 22.4%. The company's product category will continue to expand in the future.
Build the mother-infant industry chain and create the rabbi mother-infant ecological circle. The company adheres to the "product + service" strategy, while doing a good job in the research and development, production and sales of maternal and infant products, it also pays special attention to the service demand brought about by the upgrading of maternal and infant consumer consumption. In 2017, the company made a series of investments to improve the ecological circle. In May, it held a 20% stake in Merlot through a rabbi investment, and then indirectly held a 16% stake in a Danish milk powder factory to expand the field of baby food. In May, rabbi Education was set up with an investment of 4 million, accounting for 80%. Provide child care services for babies aged 18 months to 3 years old; in June, they participated in the establishment of Jiakang Healthcare, accounting for 61%, expanding the field of maternal and child health. In December, we signed a product agency agreement with Beijin Company to enrich the range of store products. The company starts from meeting the service needs of mother and child consumers, constructs the mother and child industry chain, devotes itself to creating an influential rabbi mother and child ecosystem, and leads the new life of mother and child.
Profit forecast and rating. It is estimated that the EPS of the company from 2018 to 2020 is 0.28,0.32 and 0.37 yuan respectively, corresponding to 20 times, 17 times and 15 times of PE. Refer to the peer baby clothing company 17 times PE, taking into account the company's strong extension layout expectations, enjoy a certain valuation premium, give its 19-year PE 19 times, the target price 6.08 yuan, the first coverage to give "overweight" rating.
Risk hint: the risk that terminal sales growth is less than expected; the risk that the extension layout is lower than expected.