Focus on channels, combine product and sales to help drainage, maintain the steady progress of the “4.0 flagship store strategy” of “increase” rating companies, and the collaborative development of the Bull/Mu Guang brands. The growth momentum of the new energy business continues unabated on the basis of stable traditional business advantages. We maintain the company's 24-26 EPS forecasts at $5.01, 5.69, and 6.45, respectively. Comparatively, the company's 24-year Wind unanimously expected an average PE value of 20x, and the company's leading position in the industry. We are optimistic about the company's new retail channel construction, brand upgrading, and emerging business growth in the new era. The new incentive plan and talent ownership plan are expected to fully motivate employees and give the company 26x PE for 24 years, corresponding to a target price of 130.26 yuan (previous value of 115.23 yuan), maintaining a “gain” rating.

The Channel 4.0 strategy is progressing steadily, and the combination of product and marketing helps to drive circulation

Since the release of the “4.0 Flagship Store Strategy” in December last year, the company's channel system construction has accelerated in the new era, and is committed to providing consumers with a one-stop scenario shopping experience. In March of this year, the 100th Bull all-category home improvement flagship store opened. From specialty areas, in-store stores, and specialty stores to multi-category integrated flagship stores, the company is gradually improving its own channel system and implementing the logic of using explosives to drive sales in other categories. At the same time, in response to the problems of difficult customer acquisition and high customer acquisition costs in terminal stores, the company's new retail team continues to carry out in-depth traffic operations on platforms such as Douyin and Xiaohongshu through online and offline joint promotion. Combining product and sales to help drive traffic to stores and increase customer traffic and customer unit prices.

The Bull/Muguang brand has two-wheel drive, increased sales and expanded the brand's volume as a leader in the lighting industry. The company continues to strengthen the image of the “Bull” brand as an expert in the safe use of electricity through initiatives such as becoming the first partner in China's aerospace industry. In April of this year, the company launched the first “Bull National Home Improvement Festival”, which lasted a month and a half, and launched new products such as butterfly wing ultra-thin switches and global quick-heating bathtubs to push the brand further towards high-end and fashion. In addition, the company is actively increasing the volume of “Muguang”, the industry's first professional headlamp brand, and is committed to providing consumers with integrated smart lighting solutions. We expect the company's sales expenses ratio to increase slightly year-on-year this year; however, in the medium to long term, further consolidation of brand barriers will help the company stabilize its leading edge in the industry, and the Bull/Mu Guang dual-brand driving strategy will help the company broaden its customer base and create more popular products.

The new energy business is booming

Although the company currently accounts for a relatively small share of the new energy business, the product line is rapidly rich, and offline channels are being rolled out in large numbers; it achieved revenue of 380 million yuan in 23 years, +148.64% over the same period, 17,000 professional offline distributors, and more than 1,500 operator customers. On May 8, the company officially announced Lei Jiayin as the spokesperson for the new energy charging pile business, and the product exposure rate further increased. We believe that charging pile products can quickly seize market share with the Bull brand's endorsement of the “safety expert” image and excellent product strength, and the production cycle of D+1 delivery.

Risk warning: Increased market competition; rising raw material prices; risk of new products falling short of expectations.