Offline distribution + industrial Internet two-wheel drive, distribution leader set sail again. Since 15 years, the company has transformed the distribution of electronic components, and has gone through several mergers and acquisitions, such as Xianghai Electronics, Pengyuan Electronics, Gino Technology and so on, with a distribution scale of nearly 15 billion, the top three in China. At the end of the year, the company established the Electronic Network Group, the B2B integrated service platform of the electronic industry chain based on big data, with two-wheel drive of offline distribution and industrial Internet.
The distribution market of components is broad, and the epitaxial endogenesis of the local leader is expected to accelerate the growth. The domestic components distribution market exceeds 2 trillion yuan, and the market share of the top 10 manufacturers is more than 12%, while the domestic market share is only 7%. The concentration is expected to increase. Overseas three giants through epitaxial mergers and acquisitions, the scale of more than 10 billion US dollars, the company selected high-quality distributors, endogenous extension at the same time, is expected to achieve sustained and rapid growth.
Positioning the Internet platform of the components industry, the Electronic Network Group has huge room for growth. Research and development, trial production, maintenance and other components long tail demand of more than 100 billion, the company deeply integrated Jieyangxinke (precipitation of rich components SKU and supply channel data), electronic network (China's largest online components B2B transaction information service platform) and Huaqiang Yuncang, to create an industry-class industry Internet platform to improve customer procurement efficiency. We believe that the threshold of vertical B2B platform is very high, the company has a deep understanding of the components industry, give full play to the advantages of database resources and Internet platform, is expected to achieve explosive growth.
Profit forecast and investment advice: based on the core judgment that the components industry is booming, the distribution business has both internal and external growth, rapid growth, and the volume of the B2B platform begins to expand, we expect the company's 2021-2023 net profit to be 880 million, 1.08 billion and 1.32 billion, corresponding to the 2021-5-21 closing price of 19.8,16.2 and 13.2 times, giving a "prudent overweight" rating for the first time.
Risk tips: lower-than-expected demand in the electronics industry, worsening trade war between China and the United States, inventory and accounts receivable risks