核心竞争优势：1）两大领导品牌：公司旗下Milwaukee、Ryobi均为行业领导品牌，通过长期持续的产品创新迭代和电池平台生态铸就高用户粘性和品牌壁垒。2）强劲产品力：公司率先布局锂电化无绳类产品，自研核心三电技术领先行业，持续快速迭代创新维持产品力的领先。3）深度绑定渠道龙头：深度绑定美国最大家装零售商家得宝，2023 年家得宝渠道贡献公司44%的营收，渠道壁垒护城河深厚。A global power tool leader with steady growth. The company started as an OEM business, realized its OBM transformation through mergers and acquisitions of many well-known brands, and has now grown into a global power tool leader. The company's products cover power tools, hand tools, outdoor gardening tools and floor care, and has many well-known brands in the industry such as Milwaukee, RYOBI, AEG, Hoover, and Vax. According to Frost & Sullivan, the company ranked first in the world for power tools with a 16.6% market share. The company's revenue in 2023 was USD 13.731 billion, CAGR was 14.4% from 2018 to 2023; net profit to mother was USD 0.976 billion, and CAGR was 12.1% from 2018 to 2023. Gross margin increased for 15 consecutive years, from 30.8% in 2008 to 39.5% in 2023.
Industry: The power tool track is long and snowy, and the leading share is expected to continue to increase. According to Frost & Sullivan, the global power tool market CAGR reached 5.9% in 2020-2025, and is expected to reach 38.6 billion US dollars in 2025. The penetration rate of cordless products increased rapidly. The 2020-2025 cordless and corded power tool market CAGR was 9.9%/2.1%, respectively. The penetration rate of cordless products is expected to increase from 47.0% in 2020 to 56.0% in 2025.
In terms of market pattern, the power tool industry is highly concentrated, with CR3 being 47.5%. Since power tools have strong user stickiness and the advantages of battery ecology combined with leading companies, we expect the industry concentration to increase further.
Core competitive advantages: 1) Two leading brands: the company's Milwaukee and Ryobi are leading brands in the industry, creating high user stickiness and brand barriers through long-term continuous product innovation iterations and battery platform ecology. 2) Strong product strength: The company took the lead in laying out lithium electrified cordless products, developed its own core three-cell technology leading the industry, and continued to rapidly iterate and innovate to maintain the lead in product strength. 3) Deep binding to channel leaders: Deeply tied to Home Depot, the largest home improvement retailer in the US. The Home Depot channel contributed 44% of the company's revenue in 2023, and the channel barrier is deep.
Profit forecasts, valuations, and ratings
In 2024/2025/2026, the company is expected to achieve operating income of 14.68/16.11/17.81 billion US dollars, +6.9%/+9.7%/+10.5% year-on-year; net profit to mother is 1.15/1.33/1.54 billion US dollars, respectively, +18.2%/+15.3%/+15.7%, corresponding PE 21.2/18.4/15.9X, respectively. Considering that the company is a leader in the power tool industry, the beginning of the North American interest rate cut cycle is expected to boost demand for tool terminals. Combined, the company's competitive advantage is highlighted, and share+profitability is expected to continue to increase, giving the company 25x in 24 years, with a target price of HK$122.76 per share. First coverage, giving a “buy” rating.
Risk warning
US interest rate cuts fall short of expectations; tariff costs rise; exchange rate changes; industry competition intensifies
