Boss Electric (002508) In-depth report: The sinking of e-commerce brings incremental 重庆耍耍网 company engineering channels, perfect expectations of fame
(1) According to the National Bureau of Statistics, as of October 2019, the floor space of commercial housing completed has increased by 3.8.5 billion square meters, a decline of 5 per year.5%.In 2018, the number of commercial housing completed in a year was 6.18 million, a decrease of 8 per year.7%.According to Aowei Cloud Network data, the size of hardcover houses in 2018 was 2.53 million units, an increase of 60%. The size of hardcover houses in 2019 is expected to be 3.36 million; the penetration rate of hardcover houses in 2018 is 27.5%, and is expected to reach 32% in 2019.(2) Since Ma Yun proposed “new retail” in 2016, Suning, Tmall, Jingdong and other e-commerce platforms have increased the speed of opening stores in sinking markets.As of 2019H1, the total 深圳spa会所 number of Suning Tesco Cloud retail outlets and franchised stores was 5,108 (4439, 2018), and the number of JD.com home appliance specialty stores was 1.20,000 homes (10,000 homes, 2018).(3) According to the National Bureau of Statistics, urban residents own 79 cigarette machines per 100 households in 2018.1 unit, the number of rural households per 100 households is 26, an increase of 5 over the previous year.4 and 5.6 units, the largest increase in the past five years.(4) According to the data of Zhongyikang, as of October this year, the annual retail volume of the range hood industry was 14.01 million units, with a retail value of US $ 31.2 billion.9%, -4.5%.According to industry online data, as of October this year, the internal sales of previous range hoods have increased by 14.37 million units, which has decreased by 3 year by year.3%. The sinking of e-commerce has driven demand for stock hoods in rural and urban areas.(1) The retail volume of range hoods comes from four aspects: new house demand, second-hand house demand, rural demand, and stock house demand.The industry’s retail volume increased sharply in 2018 due to the apparent shift in demand for new, second-hand and existing homes.In contrast, rural demand increased significantly in 2018.(2) As in the case of air-conditioning retail, the rapid increase in ownership per 100 households in urban and rural areas in 2018 is strongly related to the acceleration of the decline in e-commerce from 2017.As front-loading collection (engineering channels of range hoods) has largely occupied rear-loading retail, the increase of every 100 households in cities and towns has again reflected the improvement of retail sales.The increase of 100 households in rural areas directly reflects the increase in demand for rural fog machines, mainly due to the decline in e-commerce.(3) We believe that the decline of e-commerce is expected to accelerate, and with the gradual improvement of store efficiency. We estimate that the retail sales volume of the industry’s cigarette machines in 2019-2021 will be 16.87 million units, 16.64 million units, 17.58 million units, respectively, with a growth rate of -2.0%, -1.4%, 5.7%. The increase brought by the decline in e-commerce mainly comes from the low and medium price segments.(1) According to the data of Zhongyikang, the average retail price of the cigarette machine industry in the first ten months of 2019 dropped by 2.8%, a larger decline than the same period last year.According to data from Aowei Cloud, online and offline retailing of cigarette makers in the first half of this year was zero.The proportion of 5-1k increased significantly, online and offline2.The proportion of 5-3k drops significantly.In the first half of this year, the market share of TOP4 brands in the online hood market was 64%, a decrease of 4 compared with the first half of 2018.8 points, TOP6-10 brand retail sales share.2%, an increase of 3pct over the first half of 2018.(2) According to the top 30 brands on JD.com, we find that many brands in the low and mid-price segments have little product differences and choose random alternatives.To increase the share of boots to benefit from the decline in e-commerce, brand power, price strategy and channel power (offline) are the main directions.(3) The strategy of the brand name of the boss sub-brand has been adjusted since 2017: “Strengthen county areas, pilot cities, and dig deeper into townships”.As of 2018, there are 257 outlets in provincial capitals, 1025 outlets in prefecture-level cities, specialty stores in counties, 3,161 outlets, 4,493 outlets in townships, 3,600 model rural contact points, and well-known online stores. However, fame’s income has not yet been raised.Fame income in 2018 2.900 million.With the decline of e-commerce in the next few years, celebrity brands may have a heavy volume. The boss’s high-end brand is more stable, and the decline in retail revenue has narrowed.The top three brands, Fang Tai, Boss and Vantage, have kept their market share above mid-to-high end because the price has been high and they have not squeezed the mid-to-low-end segment, and the market concentration of mid-to-high end continues to increase.In the sinking of e-commerce, mid-to-low price hoods are attractive and overall have a substitutive effect on the market share of boss brands. We estimate that the offline share of the owner-branded cigarette maker retail volume will remain 19% and the online retail share will remain 11 in 2019-2021.5%, it is estimated that the retail volume of boss brand smoke machines will be 2.72 million units, 2.7 million units and 2.88 million units, respectively, with a growth rate of -8.7%, -0.8% and 6.8%. The front-loading collection (engineering channel) has occupied the rear-loading retail, and the engineering field has continued to grow rapidly.(1) Since 2016, hardcover houses have been promoted in various places every year. We expect that the penetration rate of hardcover houses will reach 31 in 2019.8%, the supporting rate of hardcover room hood is close to 100%.We estimate that the project volume of the cigarette machine industry in 2020-2021 will be 3.76 million and 4.18 million, respectively, with growth rates of 12% and 11%.(2) The purchase of new house hoods will be delivered from the front-end retail to the front-end collection of developers. We estimate that the ratio of front-end collection to rear-end retail in 2017 and 2018 (in the field of new houses) is 26: 100 and 61: 100 respectively.It is estimated that in 2019-2021, the ratios will be 95: 100, 154: 100, 178: 100.(3) The company entered the field of engineering machines earlier, and the brand power continued to maintain its head position, which has a great advantage in the engineering channel.According to our budget, from 2017 to 2018, the number of boss machine engineering channels is about 350,000 units and 500,000 units, and the market share is about 22% and 20%.It is estimated that the number of engineering channels for the boss’s hood in 2019-2021 will be about 26.8%, 37%, and 40%, the corresponding scales are 900,000, 1.4 million, and 1.67 million, with growth rates of 80%, 56%, and 19%.The company’s engineering channel revenue is expected to be 9 respectively.100 million, 14.900 million, 18.600 million, the growth rate is 80%, 63%, 25%. Profit forecast and estimation.(1) We estimate that the company’s cigarette machine revenue will be 42 in 2019-2021.0 billion, 47.2 ppm and 53.0 million yuan, the growth rate is 4.7%, 12.3% and 12.4%, there will be controversial changes next year; the company’s overall revenue is 77.800 million, 86.800 million and 97.4 trillion, the growth rate is 4 respectively.8%, 11.6% and 12.2%; net profit is 15.500 million, 17.500 million, 19.8 trillion, with a growth rate of 5.4%, 12.7%, 13.3%; EPS is 1.64 yuan, 1.84 yuan and 2.09 yuan.(3) The company continues to adjust its product structure in the engineering channel and increase high-end samples, which will increase the overall gross profit margin.Famous brands have always had channels and product foundations. With the decline of e-commerce in the next few years, there is a possibility of heavy volume.We expect the company’s revenue and net profit to turn upwards in 2020.Based on 2019 net profit, the compound growth rate in the next two years will be 13%. We are forecasting a 21-fold increase in EPS in 2019, with a reasonable expectation of 34.4 yuan, compared with the closing price of 20191213 32.17 yuan is 6.9% of the space is given a “cautious recommendation” rating. risk warning.(1) The proportion of front-loading and collecting in the cigarette machine industry is increasing. Although entering the door industry is higher, more brands will enter, and the boss’s market share growth rate may decline.(2) Consumption in low-tier cities is affected by household income. If the domestic macroeconomic downturn will significantly reduce consumer demand for cigarette hoods, it will also crowd out some high-end demand.