Zhejiang Meida (002677) Company In-depth Study: Low Penetration Dividend Accelerates Release of Industry Leaders
[Key points of investment]Low-penetration bonus overlaps excellent product attributes, and the growth space of integrated stoves is worth looking forward to.
The integrated stove industry is an emerging track in the field of kitchen appliances. It has the advantages of high soot absorption, high cost-effectiveness, and space-saving.An increase of 43 per year.
88% / 37.
96%; industry retail sales and retail volume for the three years 2015-2018 CAGR + 38.
34% / 36.
32%, much higher than the growth rate of the traditional range hood industry (CAGR + 5% over the same period).
We believe that the increase in the penetration rate of integrated stoves will mainly come from: 1) increased demand for kitchen appliances brought by the increase in urbanization rate; 2) replacement of increased demand for range hoods.
Under the neutral assumption, by 2021, the penetration rate of integrated stoves relative to traditional hoods is expected to increase to 20%, and the growth space is worth looking forward to.
The company’s growth logic changes: from barbaric high growth to “scale + refinement”.
We believe that the company’s high growth in the early stage mainly benefited from: 1) product differentiation, effectively solving user pain points, the company developed the integrated stove for the first time, which has first-mover advantages in terms of brand, capacity, and channels; 2) its rise in March 4thIn the online market, the company ‘s third- and fourth-line channel layout is more complete than the first and second-line channels, benefiting from the explosive growth period of the third- and fourth-line shed reforms;Drive the company’s performance into the fast lane.
However, after entering the new stage, the brutal growth path in the early stage has changed along with the intensification of industry competition and the decline in real estate dividends. The company’s production expansion progress has led the industry, consolidating the high-end positioning depth of the first and second 南京夜网论坛 lines for brand layout, horizontal expansion of the product matrix, and various measuresIntroduce the company’s growth logic is changing, the company’s growth path is moving towards production scale, brand marketing and refined channel operations.
The company’s future highlights: good track + high growth.
Good track: Although the overall scale of the integrated stove industry is small, the industry is growing fast, and many companies, including traditional kitchen appliances companies, have increased their capacity in the past two years, which fully shows their confidence in the future of the integrated stove industry.
From the perspective of the industry structure, the entry of traditional smoke stoves and integrated appliances in the short term may intensify competition in the industry, but in the long run, it is conducive to the expansion of the industry and accelerates the reshuffle of the industry, ultimately promoting the concentration of the industry.
High growth: For the company, sales growth and continuous price increase are important guarantees for performance. Reducing the low penetration dividend and the vast growth space of kitchen appliances will promote the scale expansion of the integrated stove industry. The company will look forward to the depth of channels and production capacity.The layout is expected to enjoy high sales growth and integrate the highest price-performance ratio of traditional stoves with integrated cookers. The integrated cookers are currently only upgraded to the third generation. In the future, there is still room for technological upgrades and replacements to continue to increase prices.
[Investment suggestion]We raise the company’s profit forecast. It is estimated that the company’s total operating income for 19/20/21 will be 1718.
6.6 billion yuan, net profit attributable to mother is 4.
7.2 billion yuan, EPS 0.
04 yuan, corresponding to PE 18.
From the perspective of performance growth and estimated hub, we give the company a 21x valuation in 2019, corresponding to a target price of 14.
70 yuan, raised to “buy”.
[Risk Tips]The real estate boom is further down; the construction of the KA channel is less than expected; industry competition is intensifying.