Zhibang Home (603801): Zhi Promotes Bang to the Whole House

Zhibang Home (603801): “Zhi” Promotes “Bang” to the Whole House

Fast-growing whole-house custom home brand.

The company’s equity structure is stable and its business scale has maintained rapid growth. The operating income CAGR in 2015-18 reached 27%.

The operating income / net profit attributable to mothers for Q1-Q3 2019 was 19.

58/2.

3.3 billion, an increase of 12 each year.

92% / 14.

49%.

The market for custom furniture is huge.

In 2018, the scale of the custom furniture market has reached 2901 million. In recent years, the growth rate has remained above 20% and has developed rapidly.

We predict that the growth center of custom cabinets will be 10% -15% in the future, and custom wardrobes will be 20% -25%.

The hardcover market has a lot of room for development, and the completion continues to pick up.

At present, the penetration rate of the hardcover market is only 20%, and there is still much room for about 80% penetration.

There is a clear gap between the period house and the completed area starting in 2016, and it is increasing year by year. The gradual completion of pre-sale houses will drive the growth of the completed area. It is expected that the completion and recovery trend will continue in 2020.

Bulk business is back up.

In recent years, it has vigorously developed bulk businesses and expanded overseas markets. The proportion of distribution / 南京桑拿网 direct sales / bulk / others (including exports) of H1 companies in 2019 is 67% / 6% / 18% / 9%, respectively.

With the adjustment of the company’s customer structure, the bulk gross profit margin continued to rise to 30%.

The bulk net margin is also at the forefront of the industry, about 11%.

Wardrobe coordinated into a high-speed growth period.

Because kitchen cabinets are the first in the decoration process, kitchen cabinets have a natural advantage in driving wardrobes. Consumers can first understand the brand. The kitchen cabinet to wardrobe industry’s turnover rate is generally 30% -50%.

Zhibang began to focus on creating customized wardrobe business in 2015, with a CAGR of 168% in 2015-2018, and the company’s wardrobe revenue in H1 2018/20194.

29/2.

580,000 yuan, +91.

62% / + 73.

87%, from the perspective of driving overall income, the wardrobe has become the main driving force.

In addition, in order to meet consumers’ one-stop purchase requirements, the company began incubating the wooden door business in 2018. The income of the wooden door business in 18.The prototype is expected to continue to grow in volume in the future.

Earnings forecast and rating: We expect the company’s EPS to be 1 in 19-21.

42,1.

64, 1.

88 yuan / share, the corresponding PE is 17.

5x, 15.

2x, 13.

3x (based on the closing price on January 10).

Risk warning: bulk business expansion under pressure, completion recovery trend is less than expected

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