Main points of the report:
Daye Co., Ltd.: a fast-growing expert in the garden machinery and OPE industry
Daye Co., Ltd. was established in 2006, the company is the domestic garden machinery industry leading enterprise, lawn mower leading enterprise. The business structure can be divided into lawn mower and all other power equipment machinery. In recent years, the proportion of lawn mower business is about 80%. By the end of 21, the proportion of the two in the main business income is about 80.02% and 19.98% respectively. The average gross margin / net margin of 17-22Q1 is 19.78% and 7.03%.
The three-wheel drive of "product + channel + capacity" continues to open up the room for growth.
On the product side, the company mainly focuses on gasoline products, with a proportion of about 70.9% by 2021, while the proportion of lithium electric products has continued to increase in recent years, rising to 13.7% by 2021. Compared with the same industry products, the company's products often have comparative advantages in innovative design, product performance-to-price ratio and so on. On the channel side, it is deeply bound to high-quality core key customers, driving the rapid growth of performance. New customers Walmart Inc and Home Depot in 2018 and 2021 have gradually become the new growth poles of the company's performance. On the production side, it is expected to accelerate the release of new production capacity, driving the company's performance to achieve rapid growth.
The track has a long slope and thick snow, and the industry shows the trend of lithium electrification / intelligence.
Garden machinery is mainly lawn mower, supplemented by other garden maintenance equipment. Garden machinery related market segments, power tools market and outdoor power tools market (OPE) market scale growth is stable, Europe and the United States are the long-term main markets. In the competitive pattern, the market share is relatively concentrated, and Chinese enterprises are rising rapidly. In the industry trend, with the drive of policy and technology, the superimposed demand side is increasingly exuberant, the permeability of lawn mower products is expected to continue to improve, and lithium electrification / intelligence has become a new growth point in the industry.
Discussion on the Future Development potential of Daye shares from the Perspective of Channel / Product / Strategy
We believe that the deep cooperation with Home Depot from the channel perspective will bring stable and sustainable performance contribution to the company. From a product and strategic perspective, with the continuous improvement of the company's innovation capability and the development of its own brand, the company is expected to achieve cross-border rubbings and replicate the successful path of TTI.
Profit forecast and investment suggestion
It is estimated that the revenue of Daye shares from 2022 to 2024 will be 2.161 billion yuan / 2.808 billion yuan / 3.65 billion yuan respectively, an increase of 35%, 30%, 30%, and net profit of 162 million yuan / 225 million yuan / 350 million yuan, respectively, an increase of 192%, 39%, 56%, respectively. The latest total equity and closing market value correspond to EPS 1.01, 1.4010, 2.19 yuan, corresponding to PE17/12/8x. For the first time, coverage gives a "buy" rating.
Risk hint
Product innovation is less than expected; product procurement cost is higher than expected; industry competition is intensified; channel expansion is not as expected; sea freight and exchange rate fluctuate more than expected