I Le Home: focus on original design, "integral cabinets + whole house customization" double business development. Adhering to the concept of "design makes home more beautiful, science and technology make beauty come true", the company locates its products at the middle and high end, and its main business is integral cabinet manufacturing and whole-house customization, constantly upgrading the design and improving the intelligent chemical plant with the combination of "industrialization" and "information". To provide consumers with exquisite design, exquisite craftsmanship, reliable quality customized household products. The company's revenue and profit continued to increase, the growth rate significantly outperformed the industry, and the gross profit margin continued to rise. In 2020, the company achieved an operating income of 1.584 billion yuan, an increase of 18.93% over the same period last year, and a net profit of 220 million yuan, an increase of 42.56% over the same period last year. The company realized an operating income of 281 million yuan, an increase of 44.34% over the same period last year, and a net profit of 12 million yuan, an increase of 458.4% over the same period last year.

Custom home industry: diversified demand-driven, revenue growth and gross profit margin differentiation. Short-term drivers:

The sales area of commercial housing in 2020 is 1.54878 billion square meters, an increase of 3.2% over the same period last year. 2021 is expected to bring about an outbreak of incremental housing demand due to the sale and completion of commercial housing. Long-term drive: China has entered the era of stock housing, hardcover / complete / second-hand housing multi-format demand, fine decoration policy is good B end, various customized home enterprises have launched a large number of business, the integration business is the future development trend, the old reform and second-hand housing demand is broad. Competition pattern: the plate presents several camps, European home, Sofia, Shangpin home with the whole house to promote, the European strong Hengqiang; Zhibang home, gold kitchen cabinet rapid growth; Piano large and brand upgrading promotion; Qumei home customization proportion continues to increase, and through acquisitions to promote internationalization; I Le Home adhere to aesthetics, quality category promotion. Corporate strategy and brand power bring gross profit margin differentiation. From 2015 to 2018, the leading gross profit margin fluctuated steadily at around 38%. Due to the fluctuation of raw material prices, the adjustment of income standards and other factors, the gross profit margin of many enterprises in the industry declined, but the gross profit margin of China Lejia remained above 40%.

Competitiveness and growth drive: products, brands and internal and external repair, production, both ends of the channel to improve efficiency. Product power: there is a homogenization problem in the custom home industry. I Lejia takes the original patent as its core competitiveness and the differentiation strategy to create a long board advantage. By 2020, the company has 141 trademarks, 184 patents, 24 software copyrights and 32 product copyrights. Brand power: the company focuses on middle and high-end positioning, and the strong brand power determines that the company has a strong premium ability. The gross profit margin of the whole house customization business has increased year by year, reaching 47.26% in 2020, gradually catching up with and surpassing the leading enterprises in the industry. and improve the brand influence through multi-dimensional marketing. Channel side: the company continues to optimize the channel structure, the direct marketing side continues to plough Nanjing, Shanghai and other direct markets on the basis of adding Hangzhou direct channels; bulk business to expand the cooperation volume of strategic procurement units, new engineering agents, promote the construction of engineering dealer channels. Three years strong layout of thousand stores, and adhere to the strategy of elite soldiers in channel development, focusing on quality and single-store revenue. The company has set a new goal of "doubling the number of thousands of stores in three years", and by upgrading stores as a means to improve store efficiency, it is estimated that the store efficiency has increased from 8255,000 yuan per store to 9479,000 yuan per store from 2017 to 2020. In the future, the company will strategically add more stores, focusing on mixed stores and whole-house specialty stores to improve store efficiency and floor efficiency. Production end: the company realizes the whole process of intelligent production, and the whole process of informationization between the sales end and the production end; in 2020, the company will move the kitchen cabinet product line located in Jiangning production plant to Lishui modern industrial 4.0 flexible factory to promote the construction of flexible factories to ensure production capacity and product competitiveness.

Profit forecast and investment advice. We estimate that the total operating income of the company will be 20.13,25.25 and 3.175 billion yuan in 2023, an increase of 27.05%, 25.43% and 25.75% compared with the same period last year. The net profit of 2021 in 2023 is 2.69,3.43 and 439 million yuan, and the year-on-year growth rate is 22.51%, 27.58% and 27.92%. The PE from 2021 to 2023 is 14.00X, 10.98X and 8.58Xd02,1.36 yuan, respectively. The average PE of comparable companies from 2021 to 2023 is 20.79X, 17.17X and 14.45X. Considering that the number of stores under the company's "three-year thousand stores" plan will expand at a high speed, and the company is in the leading position in the original design capability, the company's future brand strength, channel number and production efficiency will continue to improve, and we are optimistic about the long-term development of the company, covering it for the first time and giving it an "overweight" rating.

Risk tips: fluctuations in the real estate industry, increased competition in the industry, fluctuations in raw material prices, new production capacity can not be digested, shop expansion speed is not as fast as expected, and so on.