Incident: On the evening of November 17, Easyhome issued an announcement on the company's introduction of strategic investors and the signing of the “Strategic Cooperation Agreement”. The controlling shareholder of the company actually held and its co-actors signed a “Share Transfer Agreement” with Jinyu Group. Easyway Holdings plans to transfer its 629 million unrestricted tradable shares of the company (accounting for 10.00% of the company's total issued shares) to Jinyu Group. The current share transfer price is 3.55 yuan/share, and the total transfer price is 2,232 billion yuan.
With the introduction of the strategic investor Jinyu Group, the strong joint synergy is expected to continue to be demonstrated. On November 17, the company and Jinyu Group reached a strategic cooperation. The company's controlling shareholders actually planned to transfer 629 million shares of the company to Jinyu Group, accounting for about 10.00% of the company's total issued shares, of which the transfer price was 3.55 yuan/share, with a total transfer price of 2,232 billion yuan. Jinyu Group is a large state-owned industrial group in Beijing and a listed company with A+H shares. Its main business is the manufacture of new green and environmentally friendly building materials, equipment manufacturing and trade services, real estate development and property operation, etc., with outstanding business operation and profitability. This strategic cooperation is carried out in the context of mutually beneficial cooperation between state-owned enterprises and private enterprises. It is planned to carry out in-depth cooperation in the fields of store operation, real estate development, assembly business, property management, digital transformation, and logistics delivery network construction. Relying on the industrial advantages of Jinyu Group, the company can achieve industrial collaboration, create new profit growth points, enhance the company's continuous profitability and comprehensive competitiveness, and promote the healthy development of the home furnishing industry. At the same time, the company can use the capital, resources and policy advantages of Jinyu Group as a state-owned listed company to enhance the company's resilience to risks and accelerate the implementation of the enterprise development strategy of transformation and upgrading to a digital intelligent industry service platform.
In fact, AIGC technology continues to be promoted, leading the digital transformation company of home improvement companies to create an AIGC application — “Spirit Map”. The application can achieve everything from sketches to various renderings in only about 15 seconds, greatly improving the design service capabilities of platform users. The company is shifting towards digitalization and intelligence, integrating data assets such as home decoration design for every square meter into the Dongwo platform. At the same time, Dongwo itself will also use AIGC technology to further explore and stimulate and accurately match consumer needs, provide more accurate demand guidance to the supply side through user portraits and user behavior analysis, facilitate commodity transactions, boost home improvement demand, and achieve two-way flow between Dongwo and every flat house, leading high-quality development.
Investment advice: Easyhome is the leader in the domestic pan-home furnishing industry. The “direct management+franchise” asset-light model is developing efficiently, leading new retail in the home furnishing industry, and at the same time expanding its self-operated IP business to provide integrated home improvement services. We expect Easyhome's revenue for 2023-2025 to be 138.27, 155.18, and 17.183 billion yuan, up 6.52%, 12.23%, and 10.73% year on year: net profit of 16.36, 18.48, and 2,033 billion yuan, down 0.77%, an increase of 13.01%, and 10.00% over the previous year. The corresponding PE is 13.7x, 12.1x, and 11.0x, with a target price of 5.30 yuan for 23 years, maintaining the buy-A investment rating.
Risk warning: The development of home furnishing stores falls short of anticipated risks, the digital transformation process falls short of anticipated risks; the risk of repeated outbreaks.