Core views:
Converters and wall development solidify the foundation, and new businesses open up room for growth. According to “Bull Group: Leading Civilian Electricians, Strong Channels Continue to Empower Products” issued by GF Securities, Bull uses sockets as a starting point, leading the market share gap, and the brand is deeply rooted in the hearts of the people. After entering the market development field, the company once again reached the top of the market share in eight years, and its leading position was relatively stable. Currently, the company is actively seeking change and establishing the three major development strategies of intelligent ecology, new energy, and internationalization to help the company move steadily and far-reaching.
With intelligent lighting, the bull had a bright start without a main light. According to the China Business Research Institute, China's smart lighting industry was 39.8 billion yuan in '22, with a CAGR of 22.04% in 2017-22. Among them, there is a lot of room for market penetration in the household sector, and there is great potential for segmented racetracks without headlights. Bull Smart Electric Lighting's revenue rapidly increased from 4.05 billion yuan in 2020 to 7.90 billion yuan in 23, with a CAGR of 24.9% during this period. The “Bull” + “Mu Guang” dual brand strategy without headlights has been formed. By the end of 23, channel construction from zero to one had been completed, and future expansion can be expected.
The development of new energy vehicles drives supporting industries, and the bull charging and storage business is two-wheel drive. According to the Ministry of Public Security, sales of new energy vehicles in China reached 9.495 million units in '23, an increase of 37.9% over the previous year, driving the full benefits of the industrial chain. The company seized the opportunity to launch charging guns, piles, outdoor, industrial and commercial energy storage products into the new energy industry, and quickly completed channel construction. By the end of 23, it had developed 17,000 professional distributors such as C-end NEV auto trade stores, car beauty and decoration stores, and more than 1,500 B-side operator customers. In 23, the revenue growth rate of the new energy business reached 148.64%, achieving high growth.
Welcome to the overseas market. In '23, the company established an international division and established overseas subsidiaries such as Germany and Indonesia; launched local products around the Southeast Asian market and replicated the “distribution and marketing” strategy; for the European and American regions, new energy charging and storage were used as a stepping stone, which is expected to quickly open up the market.
Profit forecasting and investment advice. The net profit of bulls to their mothers is estimated to be 450/ 52.1/5.97 billion yuan in 24-26. As a leading civilian electrician, Bull is still making steady progress, actively exploring the second and third growth curves. Referring to comparable company valuations, Bull was given 26 x PE in 24 years, corresponding to a reasonable value of 131.26 yuan/share, and given a “gain” rating.
Risk warning. The risk of raw material price fluctuations, the risk of increased industry competition, and the risk of failure to expand new products.