Vesync is a leader in cross-border e-commerce for small household appliances, and the range continues to be rich. The company currently has three core brands, Levoit, Cosori, and Etekcity. The revenue scale in 2017-2022 reached 41.91%. The company used the advantages of the Amazon platform to grow rapidly. Since then, the Amazon channel has switched from SC to a more stable VC model, while actively broadening offline channels, and has now entered nearly 10,000 offline stores in mainstream overseas supermarkets.
The products of the company's two major independent brands are simple in appearance, continue to be rich in categories, and have a great competitive advantage.
Overseas channels stabilize and continue to expand offline, which helps raise the sales ceiling. The company's share of Amazon VC channels increased from 8.4% in 2017 to 82.6% in 2022. Compared with SC, VC is more stable, the platform drains more strongly, and has a larger sales volume. At the same time, the company actively broadened offline channels. By 23, H1 had entered more than 2,500 offline supermarket stores in the European market, and had entered more than 1,000 supermarket stores in other overseas sales regions, mainly “New Matai”, Japan, and the Middle East. In the more mature small home appliance industry, channel brand value will contribute more marginal growth, and the broadening of offline channels will help to quickly raise the sales ceiling.
The Levoit Home & Environment brand is growing rapidly, and the new category is expected to form a second growth curve. The Levoit brand is a small household appliance under the company's home environment. Currently, it mainly focuses on air purifiers. The product matrix of humidifiers, vacuum cleaners, tower fans, etc. continues to be rich. The company's products are simple and stylish in appearance, and the pricing has a high competitive advantage. The company's air purifier 23H1's sales share in the US market reached 39%, up 7 pcts compared to the same period in 2022; 23H1's humidifier market share in the US market reached 24%, ranking first; the new vacuum cleaner is expected to open up Levoit's second growth curve by switching from segmented demand to absorb hair. In addition, the company may develop new brands to enter the pet products circuit. North American pet households account for more than 70%. Pet household cleaning pain points mainly focus on problems such as smell, hair, and dust. Levoit focuses on cleaning the home environment, and is expected to have a large category synergy with new brands to build a new growth curve.
Cosori air fry products have a stylish appearance and capture regional demand trends. Cosori mainly focuses on the kitchen scene. Its products include air fryers, ovens, electric kettles, etc. Currently, it mainly focuses on air fryers. According to estimates, in 2022, North America/Latin America/Western/Eastern Europe air bombing ownership rates were 27.3%/11.9%/4.6%/0.5%, respectively (data is Euromonitor caliber estimates, actual occupancy rate or higher). Assuming that each region's air strike ownership rate under the final structure reaches 60%/30%/20%/10%, respectively, the sales scale of each region will increase 127%/94%/178%/1221% compared to 2022. The company's air bombing products are leading in micro-innovation technology. Earlier, they achieved mobile app interconnection, electronic display, better operating comfort, and achieved excellent results in Europe, where there is more room for penetration. Cosori Air Bomb ranked first in Amazon in Europe in '22, and occupied the core shelves of more than 800 offline supermarkets in Spain, Northern Europe, etc., and Cosori's overall increase was 33% year-on-year in '22.
Investment advice: The company is a cross-border leader in small household appliances, continuously enriching product categories and expanding channels. We gave the company an EPS forecast of 0.06/0.07/0.09 dollars for 23/24/25, respectively, and the corresponding PE was 10.5/8.6/7.1 times, respectively. Using a comparable company valuation method, PE was given 12 times in 24 years, and a target price of HK$6.73 was given. Covered for the first time, giving a “Recommended” rating.
Risk warning: Amazon platform policy changes, tariff policy and shipping price changes, rising raw material prices, channel development, and new product development falling short of expectations