The company signed a smart bed supporting digital electrical system production project with the Jiaxing Wangjiangjing Town Government. The main products are smart electric bed electrical systems and smart bed supporting backrests and sewing jackets. Among them, the electrical systems include adjustment systems, intelligent control systems, multi-functional operating systems, and intelligent sleep management systems. After completion, the project can produce 8 million sets/year of control systems, 4 million sets/year of control systems, 4 million sets/year of operating systems, 1 million sets/year of intelligent sleep management systems, 1 million sets/year of sewing jackets, and 500,000 pieces/year of supporting backrests for smart beds; the total investment of the project is about 1.14 billion yuan
Among them, the duties of the Jiaxing Wangjiangjing Town Government include: completing the land adjustment for land construction on this plot as soon as possible; actively assisting in various approval procedures; the obligations of listed companies include bidding to obtain land use rights for the project plot before carrying out construction; and signing a “standard land” use agreement for the industrial project in Xiuzhou District.
The signing of the agreement will help accelerate the implementation of the Qisheng Technology smart bed supporting digital electrical system production project; the implementation of the project will help the company strengthen self-service and controllable core component technology and improve supply chain stability. By introducing advanced intelligent production and control equipment, it helps to achieve independent production of the company's core components of electric beds, deepen the degree of product intelligence and accelerate technological iteration, while also helping to improve the company's profitability and strengthen core competitiveness.
The three-year supply agreement was renewed with Tempur Sealy until March 2027. In view of the cooperation between the company and Tempur Sealy International, Inc (“Tempur Sealy”) during the supply agreement period, as agreed between the two parties, the execution period of the supply agreement was extended until March 31, 2027. There were no changes to the rest of the supply agreement.
Previously, in March 2021, the company signed a 3-year electric bed product manufacturing and supply agreement with Tempur International, which agreed that the company would supply them with electric bed products from March 31, 2021 to March 31, 2024.
As the leading brand in the mattress business in North America, Temples Sealy has a high reputation and a large customer base around the world (in 2020-2022, as the company's largest customer, the company accounted for 47.2%, 50.9%, and 47.7% of its sales revenue, respectively). The renewal of this supply agreement marks Templar's recognition of the company's smart electric bed product technology, quality, supply and service capabilities. Maintaining close cooperation between the two parties is conducive to the promotion and application of smart electric beds, has a positive impact on further enhancing the value of the product, is conducive to enhancing the company's continued profitability, and has a certain positive impact on the company's current performance.
Maintain profit forecasts and maintain “increase holdings” ratings
The company is one of the earliest companies engaged in R&D, design, production and sales of smart electric beds in China, and has been focusing on this market segment since its establishment. After years of development and accumulation, the company has mastered a number of core technologies with independent intellectual property rights. The company's R&D and production of smart beds have filled the gaps in sleep monitoring and feedback in the current market, and is a leading enterprise in the industry. We expect the company's net profit to be 233/269/315 million yuan in 23-25 years, EPS 0.65/0.75/0.88 yuan/share, respectively, and the corresponding PE is 17/15/13X, respectively.
Risk warning: market competition, customer concentration, fluctuations in international market demand, exchange rate fluctuations, international trade policy, changes in the international trade environment, fluctuations in raw material prices, damage to brand image and risk of intellectual infringement, etc.