Accelerate the layout of factory stores in low-tier cities, and increase in single-store revenue to drive the company's revenue upward. In 2023, the number of Tourover factory stores reached 5,909, +1,256 compared to the previous year. The company increased its factory store layout in low-tier cities and optimized the investment promotion policy in low-tier cities. The number of factory stores is expected to continue to grow rapidly. The company broadens service and SKU categories and accelerates revenue growth in the car maintenance business. Combined with the upward repurchase rate brought about by good reputation, it is expected that factory store revenue will continue to grow. The company has adapted to the trend of electrification, cooperated with many OEMs and power battery manufacturers, and made positive progress in the electric vehicle aftermarket.
Workplace turnover increased, and product structure and business structure improvements helped the company increase its profit level. In terms of product structure, the company strategically increases the share of its own self-controlled brands and exclusive brands. Since the gross margin of the two is higher than that of tradable products, the company is expected to drive an upward profit level; in terms of business structure, the company focuses on the development of car maintenance business with higher gross margin and is committed to expanding service and SKU categories to increase the share ratio; the turnover ratio of factory stores is expected to further increase, and the increase in the number of factory stores covered by single RDC and FDC is expected to further improve the company's profit level.
Online+offline integration, strong factory and store control, and strong bargaining power granted by scale advantages build Tourover's core competitiveness. As an IAM leader, Tourover has product price advantages under scale effects, product quality and service standardization advantages under strong control, and the advantages of an online+offline integrated model. We believe this is the core reason why Tourover can have strong competitiveness over a long period of time and promote the stable operation and profit of factory stores. The domestic automotive aftermarket pattern is scattered, and in the context of the continued expansion of Tourover factory stores, its market share is expected to continue to increase and accelerate the rise in market concentration.
Investment advice: We expect the company's 2024/2025/2026 revenue to be 155.27/178.46/20.317 billion, and net profit to mother of 7.02/11.27/1,707 million, corresponding to the current market value PE of 29/18/13 times, giving it a “buy” rating.
Risk warning: 1) Increased competition in the industry affects the sales price and profit level of the company's products; 2) Store expansion falls short of expectations; 3) The trend of electrification affects the company's traditional main business.