Key points of investment:
Maintain the increase in holdings. Maintain the 2024-26 EPS forecast of 1.13/1.43/1.73 yuan, with a growth rate of 37/27/ 21%; maintain the target price of 19.35 yuan and maintain the increase in holdings.
The plan is to acquire Tongtuo Technology in cash, hoping to complement each other's advantages and strengthen competitiveness. 1) The company plans to purchase 100% of Tongtuo Technology's shares held by Huading Co., Ltd. through cash payment. The two parties negotiated and determined that the transaction consideration for 100% of Tongtuo Technology's shares is 700 million yuan; 2) If the acquisition is completed, it will be beneficial to: ① Strengthen the scale advantage, and Tongtuo's revenue account for 52% of the company's revenue in 2023; ② achieve complementary advantages of both parties, such as complementary categories (rich product line), storage optimization (improving the geographical accessibility and responsiveness of products), supply chain integration (joint development of proprietary brand products), cost control (reduce the cost of joint procurement of individual products), cost control (reduce the cost of joint procurement of individual products), cost control (reduce the cost of information allocation) Capability and operation upgrades , synergy effects can be expected; ③ Improve the global layout.
Tongtuo Technology mainly focuses on household, electronics and other categories. Profits and turnover have improved in the past 2 years. 1) Established in 2004, Tongtuo is headquartered in Shenzhen, and is committed to meeting the needs of global consumers for cost-effective lifestyle products; 2) Revenue structure split: ① By category: in 2022 - 23, the household category accounts for 75/ 79%, the electronics category accounts for 18/17%; ② channel division: in 2022 - 23, Amazon accounts for 45.4/48.9%, AliExpress accounts for 13.4/ 14.3%, Mei Keduo accounts for 6/ 8.2%, eBay accounts for 5.3/ 5.3%; ③ By region:
In 2022/23, Europe accounted for 46.4/46.9%, America accounted for 29.8/ 31.2%, and Asia accounted for 20/ 18.5%; 3) Core data: 2022/23 revenue of 34.5/3.41 billion yuan, net profit of -3.1/100 million yuan respectively, and inventory turnover of 3.35/4.29 times, respectively.
The cost structure is expected to be optimized, and the current valuation is undervalued. 1) In the context of cross-border platform wrestling, Amazon's policy friendliness has increased, and leading sellers are expected to improve their costs and concentration; 2) Actively promote the layout of new regions, new channels, and new categories, and the results are expected to show results; 3) Through optimization of first-haul transportation methods and final travel, the cost structure is expected to improve and profit margins are expected to rise; 4) Expect to continue the higher dividend policy. Currently, PE will be even lower, and the valuation will be underestimated.
Risk warning: New business development falls short of expectations, risk of concentration on a single platform, risk of acquisition matters, etc.