The company's recent situation
Recently, we invited the company's management to attend the CICC 2024 Mid-Term Strategy Meeting. Management and investors had in-depth communication on the company's recent business situation and future development strategies. We believe that with the active layout of the assembly business and the accelerated layout of overseas markets, the company's performance is expected to gradually pick up, and the market share can be expected to increase.
reviews
1. Omni-channel development is steady, and the upward trend in performance is improving. 1) Retail: Recently, the company has continued to upgrade the package package. The original price is 1,499 yuan/1,699 yuan per square meter of Ousong's core board/solid wood multi-layer safety board. After upgrading the kitchen clothes package, it is only 999 yuan/㎡. The quality of package products and discounts have been further improved. 2) Engineering: Based on long-term strategic considerations, the company's engineering side development maintains a stable trend, and the customer structure is flexible and optimized. 3) Assembly: The company increased investment in the assembly channel this year, continued to empower dealers through headquarters training and new media marketing, and encouraged cooperation between dealers and assembly companies. We expect that the assembly channel is expected to maintain a rapid growth trend. We believe that with the gradual release of market demand, the company's omni-channel package and assembly business continues to gain strength, and performance is expected to rise steadily.
2. Overseas market expansion has accelerated, and performance growth has ushered in a new drive. Since the company opened its first overseas brand store in Bangkok, Thailand in 2022, the company has accelerated the pace of overseas market expansion and successively opened offline retail stores in countries such as Singapore, the Philippines, and the Maldives. On June 1 of this year, the company's Tokyo store in Japan and the Cebu store in the Philippines officially opened. We believe that with the company's deep C-side experience in the domestic market, it is beneficial to enable the continuous development of overseas divisions, and the company's performance will usher in new growth points.
3. The market share is expected to increase with trade-in and cost-effective two-wheel drive packages. Against the backdrop of increased competition in the industry, leading companies are expected to further expand their market share with the support of their strong brands. Since this year, the new real estate policy has led to a recovery in second-hand housing transactions. The company has actively promoted the development of the trade-in business, and launched multi-layer solid wood composite panels and competitive cost-effective drainage packages. The quality of promotional products has improved. We believe that the trade-in business is expected to increase the stock housing market. Cost-effective packages will help the company attract customers and dig deeper into sinking market demand, and the company's market share is expected to continue to increase.
Profit forecasting and valuation
The 2024/2025 profit forecast remains unchanged. The current stock price corresponds to the 2024/2025 9x/8x P/E, maintains the industry rating and target price of 21 yuan, and corresponds to 2024/2025 14x/13x P/E, with 51% upside compared to the current stock price.
risks
The decline in real estate sentiment has exceeded expectations, and market competition has intensified.