The first security door listed company in China. The company was founded in 1996 and listed on the main board of the Shanghai Stock Exchange in 2021. Its main business is security doors, smart locks, wooden doors, smart homes and other products. It is the first national security door lock listed enterprise. Mr. Wang Yuebin, chairman of the board, and those acting in concert hold a total of 77.30% of the shares. From 2016 to 2022, the company's operating income increased from 1.45 billion yuan to 2.203 billion yuan, with an average annual compound growth rate of 8%, and the gross profit margin / net profit margin was basically maintained at 30% to 10%. The company strictly controls the risk and provides for some high-risk real estate customers in 2022. The net cash flow of operating activities on the basis of 23H1 income exceeding that of 2021H1 before history is 144 million yuan compared with the same period last year, and then set out again.
The supply and demand pattern of safety door industry is expected to be optimized. We estimate that the annual demand for security doors in 2021 will be 5242 million yen, and the market space will be about 42 billion yuan. At present, the concentration of the security door industry is not high, and the market share of Wang Li'an Fang, a leading enterprise, is only 4.41%. We believe that, 1) from 2009 to 2022, the sales area of the real estate industry will increase from 8.09% to 22.13%, and the collection of real estate may continue. 2) the new national standard "General Technical conditions for Security doors against Theft" will be formally implemented in January 2024, which strengthens the requirement of anti-damage ability. the unqualified rate of security doors sampled by the Municipal Bureau of Supervision of Zhejiang Province in October 2020 and September 2021 is more than 4%. The superimposed consumption upgrade promotes the penetration rate of the third generation products intelligent lock safety doors, and the competitive advantage of large enterprises is further enhanced. 3) from 2017 to 2022, the scale of smart home increased from 325.5 billion yuan to 651.6 billion yuan, with an annual growth rate of 14.89%. Head IT enterprises are usually more willing to cooperate with brand enterprises, and intelligent advantages may be formed. The above three driving factors may promote the optimization of industry supply and demand pattern and increase the degree of concentration.
Capacity expansion helps the company break through the bottleneck, and the cost is in the channel of decline. From 2016 to 2019, the company's designed annual production capacity is about 1.68-179 million tons, the capacity utilization rate is maintained at about 95%, and the capacity bottleneck is significant. Changtian Intelligent Manufacturing Base is one of the most advanced production lines in the industry. After 2021, the factory is gradually put into production, the company's production capacity enters the expansion cycle, the cost center continues to move down, and the development is expected to press the acceleration button.
Wooden door, intelligent lock extension development, "1x N" channel coordination can be expected. In recent years, while consolidating the advantages of the main business of security doors, the company has accelerated the development of wooden doors, intelligent locks and other businesses. The company security door main business scale is large, take this as the breakthrough, is expected to achieve channel coordination in the engineering side, and promote the development of "1mm N" mode. We believe that Asahelai, a leading international security company, has ample room for long-term development.
Profit forecast. We estimate that from 2023 to 2025, the company's income will be 29.54 soybean 36.80 / 4.591 billion yuan, a year-on-year growth rate of 34.1% / 24.6% / 24.8%, and a year-on-year net profit of 1.81% / 2.42% / 305 million yuan, a year-on-year growth rate of 521.6% / 33.6% and 25.9%, corresponding to the closing price of 22.34 / 16.73 / 13.29x PE on October 23. For the first time, coverage gives a "buy" rating.
Risk hint
Capacity release is lower than expected, permeability improvement is lower than expected, demand is lower than expected, cost is higher than expected, and systemic risk.