朝云集团(06601.HK)首次覆盖报告:家居品牌焕新 宠物赛道接力

06601.HK 's first coverage report: home Brand Huanxin Pet track Relay

國盛證券 ·  Jun 22, 2021 00:00

The new management is determined to forge ahead and lead the home care leader to cut into the golden track of individual care and pets. The company originated from the Chaowei Division of Libai Group, focusing on home care business such as pest control and mosquito repellent. In 2019, a new generation of management team was in place, and the strategy was extended to the high gross margin gold track such as individual care and pets. After 18-19 years of critical stages of organizational change, brand upgrading, product innovation, supply chain reform and channel carding, the company has entered a period of rapid growth from steady growth. At present, it has Chaowei / Weiwang / Beibeijian / New Zealand 4 home care brands, run vegetarian care brands, stubborn tail / Germany is the two major pet brands. Thanks to the strategic layout and strong execution of management, the company achieved revenue of 1.702 billion yuan (yoy+23%) in 2020, CAGR8.13% in 17-20, net profit of 219 million yuan (yoy+38.17%), gross profit margin of CAGR7.56%, in 17-20 increased from 35.9% to 43.6%, net profit increased from 12.6% to 13.7%.

The strategy is to set up a pet business department, which extends from pet care to pet food. The pet economy is growing rapidly. The scale of China's pet industry reached 72.7 billion yuan in 2020, CAGR reached 24% in five years, pet food sector accounted for 55%, and CAGR in five years reached 30%. The industry has broad space and has not yet formed a monopoly. The new management set up the Pet Division to strategically lay out the golden track, and the general manager of the division has 21 years of experience in the consumer goods and pet industry. Relying on the advantages of resources such as product research and development and existing channels, the company cuts in from the pet care track to launch two brands, "stubborn tail" and "Deshi", which are mainly online / offline channels for the public / middle and high-end market. Among them, "stubborn tail" became the first brand in the perfume except flavor category after 4 months on the market through Tmall's flagship store, and was selected into the annual list of high-quality new products certified by Tmall small black box. and has won two major pet industry awards-Tmall gold makeup award "the most potential pet cutting-edge brand" and pet award "top ten cutting-edge brand award". Then the pet business department extended to the field of pet food with broader prospects and faster growth, and in April 21, "stubborn tail" launched a new series of pet staple food series "stubborn mouth". The company plans to launch a total of 62 new products in 21-22, including 31 pet lines, accounting for 50%. We estimate that the pet business will achieve RMB 4211,758 million in 2021-2023, and the revenue share will be increased to 7%, 14%, 19%, respectively.

Competitive advantage: multi-brand and multi-category layout, strong drainage power, flexible and efficient R & D supply system. 1) Brand advantage: it has a well-known and diversified product portfolio (28 home care subcategories, the largest in China, and the number of individual care / pets has rapidly increased to 16). The home care industry ranks fourth, with a market share of 6.3%. The 20-year global operation membership system has more than 6 million members. 2) Channel advantages: in long-term cooperation with Libai, offline channels spread all over the country and sank deeply (about 620000 distributor outlets and 11000 retail outlets), and offline channel revenue increased by 14.4% in 20 years. Online channel covers 26 self-operated online stores, revenue has increased by 92.8% in the past 20 years, and three digital platforms have been established to realize digital management of distributors. 3) R & D advantages: a combination of self-owned and outsourced capacity, a vertically integrated flexible supply chain system, employing 40 third-party manufacturers to assist in production and unified management, respond quickly to changes during the epidemic, quickly launch five products within 10 days and increase production capacity by more than 10 times.

Investment suggestion: we estimate that the company's income from 2021 to 2023 will be 2.103 million yuan (CAGR25.3%), and the net profit of return to the parent will be 2.85 million yuan (CAGR29.1%), corresponding to an EPS of 0.21 yuan, 0.29 and 0.36 yuan per share, respectively, with a net profit of 2.85 million yuan and a net profit of 481 million yuan per share. As a leading household care company, the basic set is sound and actively develop the new pet track, the performance has a good support and good growth. Based on the growth of sub-business, we use PE and PS valuation for home and personal care business and pet business respectively, of which: home and personal care business 2021 return net profit of 249 million yuan, given 45 times PE, corresponding target market value of 13.5 billion Hong Kong dollars, pet business 2021 revenue of 150 million yuan, 12 times PS, corresponding target market value of 2.2 billion Hong Kong dollars, a total target market value of 15.7 billion Hong Kong dollars, corresponding to the target price of 11.78 Hong Kong dollars For the first time, coverage gives a "buy" rating.

Risk tips: increased competition in the industry; upward prices of raw materials; product upgrading and promotion is not as expected.

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