The scale effect constructs the industry barrier, and the coordinated development of industry-finance combination. Through professional ability, distributors undertake financial pressure for mobile phone brands, provide up-to-date order information, and improve the efficiency of mobile phone transfer from brand manufacturers to final consumers, which is an important link in the industry chain. Estelle is a leading enterprise in the mobile phone distribution industry, with its own sales team and service network in 31 provinces and more than 300 local networks, with nearly 60,000 channel partners and nearly 100000 retail terminals. Estelle takes intelligent terminal distribution as the core, financial and supply chain services, intelligent retail business and communication services develop in coordination, with the strategic goal of building a comprehensive sales and service platform with the combination of "industry and finance".
Mature brand channels and extensive sales network to build core competitiveness. Apple is a well-known distributor of Apple Inc, and its Coodoo is the largest chain of Apple Inc products in China. Ashder plans to increase the proportion of Gongqingcheng Kugui's contribution in Xingmai Information from 2.18% to 23.72%, and participate in the acquisition of Glory. As the core distribution partner of Glory, this capital increase will further strengthen the strategic cooperation with Glory manufacturers, give full play to the synergy and enrich the 3C digital product matrix. After Glory Independence, it is expected to break away from the positioning of medium-and low-end models under the Huawei system and develop high-end models. Estelle has a national distribution network and efficient logistics system, covering T1-T6 omni-channel retail stores and online retailers.
Seize the opportunity of 5G replacement trend, category expansion to boost income growth. With the gradual improvement of 5G technology infrastructure, the shipping scale of 5G mobile phones is gradually expanding, and the market demand is rising, triggering a new round of replacement tide. According to IDC's forecast, global 5G mobile phone shipments will increase significantly to 220 million units in 2020 and continue to maintain rapid growth, and the 5G replacement trend will benefit mobile phone distributors such as Estelle. Ashder actively layout product categories, smart phones and 3C categories of "two-wheel drive", in the digital upgrade scenario to provide new growth space and potential.
China's e-cigarette market has low penetration and high growth, and the company has achieved remarkable results in expanding the new category market of e-cigarettes. With the infiltration of fog culture and the improvement of residents' attention to health, e-cigarettes are favored by more and more people all over the world. Compared with western developed countries, China's e-cigarette market penetration is low, there is a larger potential market space, and the competition pattern in the industry is clear.
Grasping the good cooperation with the industry leader and expanding the e-cigarette business will help to grasp the future performance growth point.
Profit forecast and investment suggestions: the company comprehensively implements the new retail infrastructure platform strategy around mobile communication terminal products, digital electronic consumer products, communication services, e-commerce and other fields, comprehensively promote the all-digital online and offline integration of the new retail network construction. Opening up the high-growth e-cigarette market is expected to bring new performance growth momentum for the company. It is estimated that Estelle's net return profit for 2020-22 will be 7.4x108max 1.56 billion yuan, with a growth rate of 115%, 46% and 45%, respectively, with a corresponding EPS of 0.59,0.87,1.26 yuan per share, and the corresponding PE is twice that of 21-14-10. The relative valuation method is used to give Ashder 25 times PE in 2021, corresponding to the target price of 21.75 yuan, covering it for the first time and giving it a "buy" rating.
Risk Tip: cooperation with BABA is not up to expectations; New Glory mobile phone sales are not as expected; cooperation with e-cigarette brands is not as expected; e-cigarette regulatory policy uncertainty; e-cigarette industry development is not as expected.