Sub-category to see the channel to the warehouse has been completed, the main fist product sales are better after 2022H2 and 23H1 overseas continuous destocking, the current multi-product destocking situation is good. The company's sales of sunshade products account for more than 70%. 1) folding awning is mainly completed in Walmart Inc through promotion to inventory; 2) car awning is mainly sold in Costco Wholesale Corp and e-commerce channels, and inventory is good through promotion; 3) Star awning is selling well in European and American markets, there is no inventory backlog; 4) due to the relatively serious homogenization of sunshade products, the de-inventory situation is not obvious; 5) pet cage customer sales are relatively stable, inventory pressure is not big. The company's head customer sales are relatively stable, Walmart Inc and other head customers reduce product costs through centralized procurement, forming a price advantage, benefiting both supply and demand. In recent years, there has been a significant increase in the number of high-quality customers with annual sales of more than one million US dollars, and the company's production capacity will give priority to meeting the head customers.

Star canopy products with high growth, product depth and channel breadth potential star canopy is a best-selling product developed by the company based on market demand and deeply recognized by consumers, contributing 400 million in revenue in 2022. The best-selling trend of products is gradually taking shape, which is in line with the trend of overseas consumption, gradually replacing wooden canopy, simple and beautiful fashion trend; the potential of sales channel is expected, the demand for star canopy is increased, and the scale of cross-border e-commerce is growing rapidly. under the traction of good online sales in some areas, it will gradually expand to offline sales, so as to be close to mass consumers and improve sales.

Broaden the channels of cross-border e-commerce and strengthen the construction of independent brands

In 2022, the company's cross-border e-commerce revenue was 240 million, an increase of 40%, accounting for 17.55% of the total revenue, which was sold through Amazon.Com Inc and wayfair. The company's cross-border e-commerce all use their own brands, combined with the market promotion of cross-border e-commerce, using digital new media, consumer leaders and other means to gradually promote their own brands.

The market capacity of outdoor leisure furniture is large, and the products of gallery racks have a market base. in 2021, the export scale of China's main products of outdoor leisure furniture and supplies is 30.868 billion US dollars, which is mainly sold to Europe and the United States and other developed countries and regions, of which the United States accounts for the highest proportion. Single-family houses with courtyards in Europe and the United States have a high demand for the health and comfort of leisure activities; at the same time, the replacement cycle of outdoor leisure furniture and supplies is relatively short, personalized and fashionable demand to speed up product upgrading and promote the growth of industry demand. The annual retail sales of North American wooden gallery products are about 300 million US dollars, and there is a lot of room for the industry. the company continues to enhance its competitiveness through product innovation.

Profit forecast and rating: in the future, while continuing to consolidate the existing business foundation, the company will continue to focus on the main business, pay attention to the development of new products, create popular goods, carry out digital workshops, and realize large-scale production. Vigorously invest in business model innovation and brand marketing construction. We estimate that the annual income of the company from 23 to 25 is 14,18 and 2.2 billion yuan respectively, the net profit returned to the mother is 1.0,1.2 and 150 million yuan respectively, and the corresponding PE is 25,20,17x respectively.

Risk tips: fierce market competition; exchange rate fluctuations; raw material price fluctuations; trade friction risk and so on.