Recent situation of the company
The company held a performance presentation meeting in May, and the management gave a detailed answer to the company's recent business situation, the process of digital transformation and future development plans.
Comment
1. Vigorously develop integrated products and promote continuous improvement in performance. The company's 1Q21 newly signed order is about 1.14 billion yuan, including 970 million yuan for home decoration business, 93.91 million yuan for Seiko business and 75.77 million yuan for public wear business. With the rapid growth of market demand for assembly in recent years, the company has also invested heavily in building Suimei (product-oriented, standardized assembly) and Ruizu (overall plan for decorating luxury villas). The company's business has turned from losses to profits in the second half of 2020. mainly because the company's integrated business is gradually mature, and with fine management to reduce costs and increase efficiency, the company plans to continue to optimize and adjust inefficient stores in the future. Strengthen investment in high-quality stores and markets, enhance store profitability, and vigorously promote the development of assembly business.
2. The digital layout should be continuously improved and the terminal empowerment should be strengthened. Through the independent research and development of digital science and technology home decoration system, the company connects the whole business of home decoration, and realizes the full-chain digital operation and management in the home decoration industry. 1) Digital marketing customer acquisition and customer source conversion system: through big data to accurately portray customers, enhance customer information insight, fully record customer needs, improve communication efficiency, and improve customer clue conversion rate; 2) Digital design system: real-time effect display using virtual reality technology and naked eye VR, to improve customer experience and sales conversion efficiency 3) the whole chain intelligent operation management system of home decoration business: from the introduction of marketing clues, sales transformation process, order execution, project delivery, after-sales service and other home decoration life cycle operation management and control to ensure good project delivery.
3. Cooperate with Xiaomi and look forward to mutual benefit and win-win situation in the future. On October 27, 2020, the company signed an "equity transfer agreement" with Xiaomi Technology. After the completion of the transfer, Xiaomi holds 21 million shares of the company (5.01% of the total share capital). The two sides have jointly completed the BBC model of the first river villa project and the first Lanyinshan single-family villa project. We expect that in the future, the company will further cooperate with Xiaomi in Internet advertising, home decoration, AloT couplet technology and smart home lifestyle building, so as to empower each other in business and achieve win-win results.
Valuation and suggestion
We maintain the company's 2021 / 2022 earnings per share forecast of 0.57 yuan 0.63 yuan, the current stock price corresponding to 2021 / 2022 Pamp E is 10 times, maintain the outperform industry rating, maintain the target price of 9.01 yuan, corresponding to 2021 / 2022 Pamp E is 16 times 14 times, there is 46% upside space compared to the current stock price.
Risk
Raw material prices fluctuated sharply, and real estate regulation exceeded expectations.