Investment logic

The number of the company's initial public offering is 13.5772 million shares, and the offering price is 19.18 yuan per share, raising a total of 260 million yuan. The funds raised will be used for Lightning Bee e-commerce platform optimization project, intensive management and operation center construction project, information system expansion project and supplementary liquidity.

The number of offline stores of the company ranks first among the official authorized service providers of Apple Inc mobile phone in China, and the brand effect is significant. As of June 30, 2017, Baihua Yuebang covers business in North China, East China, South China and Northeast China, with a network of 139 after-sales service stores, including 125 direct stores and 14 cooperative stores. It covers 22 provincial regions and more than 90 cities, and has 123 authorized stores under the Apple Inc brand. There are 24 stores in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin and other domestic first-tier cities, accounting for about 30% of Apple Inc's authorized service provider stores. Baibang and Apple Inc brands have strong stickiness.

As the first unit of the national omni-directional and systematic layout of the mobile phone after-sales service market, the business covers the "guarantee-use-repair-exchange" whole life cycle of mobile phone after-sales service, which is very scarce. Under the background of the sharp decline in the growth rate of mobile phone ownership year by year, the company has not been limited to the simple maintenance business, and has begun to lay out the whole after-sales service market in an all-round way. repair, maintenance, security and second-hand phone recycling and sales and other businesses through online and offline integration for systematic and deep integration. Relying on the high coverage of offline stores, the launch of own-brand goods, and the second mobile phone business, which forms a complementary relationship with the first major business, mobile phone maintenance, carry out a national systematic layout to achieve one-stop butler-like service. In the current A-share market, it is unique and extremely scarce.

Valuation

For the first time, the buy rating is given, and the target price is 42.84 yuan: we forecast that according to the 2018 merger table, the operating income of Baihua Yuebang 2017, 2018, 2018, 2019, 2018, 2019, 2018, 2019, 2018, 2019, 2018, 2019, 2018, 2019, 2018, 2019, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 2018, 201 Give the target price 42.84 yuan and give a buy rating for the first time.

Risk

The company relies too much on Apple Inc's mobile phone maintenance business for its main income, and the decline in Apple Inc's mobile phone sales will bring risks; the company is an officially authorized service provider for Apple Inc's mobile phone, and the unit price of the service is facing the risk of decline. In addition, the company has had internal control risk events. Due to the large number of second-hand mobile phone recyclers and fierce competition, there is a risk that the second-hand mobile phone business does not meet expectations. Apple Inc mobile phone shipments are affected by the down-frequency gate, and the maintenance volume is closely related to the previous year's shipments, so there is a risk that the growth rate of maintenance volume will decline.