Summary content
The company is the founder of Yuba in China, and the “home appliance+home” dual-track development. The company's products are arranged around roof spaces such as bathrooms and balconies, and revenue is steady. The CAGR for 15-23 was 9.80%, leading the profit margin industry, with a comprehensive gross profit margin of 47.48% and a net profit margin of 15.65% in 23. 24Q1 achieved revenue of 381 million yuan, +10.06% year over year, and net profit to mother of 52 million yuan, +9.82% year over year.
Yuba's consumer pain points are safety and functionality. The company has established a leading position in the industry through continuous product innovation. This business is the company's cash cow business. Yuba integrates functions such as heating, ventilation, and lighting. It is mainly used in bathrooms. The dark and humid environment makes consumers have high requirements for product safety and functionality. As the founder of Yuba, the company supports iterative product innovation through R&D and leads the development of the industry. Currently, it has a market share of 20%, and is firmly in a leading position. The company's Yuba business had a revenue CAGR of 3.52% from 18 to 22, maintained a gross margin of more than 50%, and accumulated dividends of 1,132 billion dollars since its launch in 2020. It is a cash cow business.
C-side channels account for 80% and actively embrace new media. The company has maintained more than 5% of R&D expenses for many years. The industry's first thermal energy ring bath has a patent barrier, and the thermal energy refraction area has increased by 2 times, significantly leading its peers.
The company's sales channels are stronger than the C-side (including retail, e-commerce, and home improvement companies), accounting for nearly 80% in 22 years, creating a very good cash flow. In addition, in recent years, the company has rapidly expanded live streaming and promotion of emerging platforms such as Xiaohongshu and Douyin. Although there is still room for improvement in the number of fans and attention compared to leading integrated electronics brands (such as Midea, etc.), it is significantly ahead of its top electronics peers.
The same technology and channel collaboration have followed the trend to expand clothes dryers and create a second growth curve. Relying on the technical advantages and patent accumulation of independent production of Yuba hosts, the company quickly entered the category of smart clothes dryers that have common functions with Yuba technology in terms of drying and other functions. At the same time, online channels and e-commerce operations capabilities can be synchronized. Comparative analysis of peer products. We believe that the company's clothes dryers have excellent performance, comprehensive functionality, strong price advantage, and competitiveness. The revenue CAGR of smart clothes dryers from 19 to 22 was 11.02%, which is expected to become a new profit growth point in the future.
Investment advice: We expect the company to achieve net profit of 3.57/4.00/452 million yuan from 2024 to 2026, corresponding EPS of 0.89/1.00/1.13 yuan/share, respectively. The latest annual dividend rate is 6.54%, giving the company 18 times the target PE for 24 years, corresponding to the target share price of 16.02 yuan. First coverage, giving a “buy” rating.
Risk warning: the risk of fluctuating raw material prices; the risk that the real estate industry's recovery falls short of expectations; the risk of increased competition in the industry.