annual report is gradually disclosed. The agglomeration effect of the leading home appliances highlights
Recently, Supor and Joyoung annual reports have been released, and the agglomeration effect of the leading home appliances highlights. Supor Joyoung both delivered double-digit growth results, with Supor's revenue of 17.85 billion yuan, a year-on-year increase of 22.8%; Joyoung's revenue of 8.17 billion yuan, a year-on-year increase of 12.7%. Supor's net profit attributable to shareholders reached 1.67 billion yuan, a year-on-year increase of 25.9%; Joyoung shares were 750 million yuan, a year-on-year increase of 9.5%.
Guolian Securities pointed out that judging from the new products of leading enterprises in 2019, small home appliances have shown subdivided and product benchmarking population stratification. Leading companies are expected to continue to grow in price and volume by seizing the market segment and accurately benchmarking consumer groups. It is recommended to continue to pay attention to home appliance leaders Midea Group, Aojiahua and Supor for a long time.
Supor: The performance in 2018 slightly exceeded expectations, and 2019 is more worth looking forward to
Supor 002032
Research institution: Shenwan Hongyuan Analyst: Zhou Haichen, Liu Zheng Date of writing: 2019-02-28
Company's performance slightly exceeded expectations. The company released its 2018 performance report, with annual revenue of 17.851 billion yuan, a year-on-year increase of 22.75%, and net profit attributable to shareholders of 1.67 billion yuan, a year-on-year increase of 25.91%. The company achieved a consolidation of Shanghai Cyber in 2018. After retrospectively adjusting the data of the same period last year, it achieved revenue of 4.457 billion yuan in the fourth quarter, a year-on-year increase of 17.23%, and net profit attributable to shareholders of 565 million yuan, a year-on-year increase of 34.84%. The profit growth rate of the fourth quarter in the fourth quarter was outstanding, the company's revenue was in line with expectations, and its performance slightly exceeded expectations.
The domestic and foreign sales are developing balancedly, and new categories contribute new momentum. 1) By channel, we expect that the growth rate of orders from SEB transfers by the company's exports will continue to accelerate month-on-month in Q4, with a single quarter expected to grow by about 20%. Domestic sales will slightly fall back to around 15% after the rapid growth in the first three quarters. The amount of related transactions with SEB is expected to not meet the target set at the beginning of the year throughout the year, but the gap is not large. At the same time, thanks to the expansion of new categories in the domestic sales market and the continuous increase in the market share of traditional categories, the growth rate of exports that did not meet the expectations of the beginning of the year was effectively filled by the domestic sales market. 2) By category, the company's traditional categories represented by rice cookers and electric pressure cookers have maintained a steady increase in market share, while the average price brought about by the structural upgrade of the product has steadily increased. According to data from Zhongyikang, in 2018, the sales market share of the company's traditional advantageous products such as electric pressure cookers, electric stew cookers, rice cookers and induction cookers reached 33.8%, 25.07%, 30.69% and 27.55%, respectively, up 0.74pcts, 0.1pcts, 0.22pcts and 1.51pcts respectively over the same period last year. In terms of average prices, the sales volume increased by 6.99%, 16.14%, 12.34% and 11.31% respectively in 2018. Among the emerging kitchen tools, the thermos cup and tool business has been accumulating brands in the cooking utensils for many years, and is expected to achieve rapid growth of 40-50% in 2018; kitchen appliances have experienced 10 years of continuous operation, and have increased their investment in online channels in 2018, and have begun to gradually release growth momentum, which is expected to grow by more than 50% throughout the year; environmental household appliances such as hanger and vacuum cleaners have also achieved nearly 50%. China Yikang data shows that the sales market share of vacuum cleaners and hanger in 2018 has increased significantly by 2.1 pcts and 8.28 pcts, and the average price has also increased by 31.37% and 9.69% year-on-year. 3) On the one hand, thanks to the continuous optimization of the product structure, the company's gross profit margin in 2018 increased by 0.35pcts year-on-year, directly increasing profit by 62.7214 million yuan, contributing profit growth rate by 4.75pcts; on the other hand, the increase in share payment expenses caused by the implementation of restricted equity incentives was 55.4258 million yuan, which in turn led to an increase in management expense ratio by 0.28pcts. At the same time, the company's other income increased by 34.24%, effectively increasing net profit. We expect it to be caused by the increase in government subsidy income from income tax refunds brought by the certification of high-tech enterprise of the company's subsidiary.
profit forecast and investment rating. We maintain the previous profit forecast, and expect the company's net profit from 2018 to 2020 to be 1.643 billion yuan, 2.001 billion yuan and 2.381 billion yuan, respectively, an increase of 25.7%, 21.8% and 19.0% year-on-year, and earnings per share were 2.00 yuan, 2.44 yuan and 2.90 yuan, respectively, corresponding to dynamic price-to-earnings ratios of 30 times, 24 times and 21 times respectively. The company's domestic sales market relies on category expansion to create new growth points. At the same time, the channels of the third and fourth tier markets continue to sink, e-commerce channels continue to increase investment in marketing resources, and exports are backed by SEB Group. Order transfers have both space and sustainability. We are optimistic that the company's performance has long-term sustainable and stable growth potential and maintains a "buy" rating.
Midea Group: Profits meet expectations, internal integration and policy Dongfeng
Midea Group 000333
Research institution: Dongguan Securities Analyst: Li Longhai Date of Writing: 2019-01-16
Event: On January 14, 2019, Midea Group released its 2018 annual performance report, with net profit attributable to shareholders of listed companies increasing by 15% -20% over the same period last year, and profit: 19.8 billion yuan -20.8 billion yuan.
Comment:
2018 performance analysis and 2019 performance expectations. (1) Performance: Revenue in the first three quarters of 2018 increased by 10.46% year-on-year; net profit attributable to shareholders increased by 19.35% year-on-year, of which total operating income and net profit attributable to shareholders increased by 1.38% and 18.55% year-on-year respectively. Air conditioner sales in 2018 were better than those in the second half of the year. In October and November, air conditioner installation cards increased by 5%-6% year-on-year. It is estimated that the inventory of air conditioners in early December 2018 was more than 5 million units; kitchen appliances were greatly affected by real estate, and revenue in the third quarter decreased by more than 20% year-on-year. At the same time, it is expected that the growth rate of air conditioners and kitchen appliances will be faster than the industry's growth rate. It is comprehensively judged that the company's performance in the fourth quarter will not deviate significantly from the third quarter. Based on the expectation of the company's market share increase in 2019, and the implementation of the National Development and Reform Commission's policy to promote the implementation of home appliance consumption, it is estimated that the company's overall revenue in 2019 will increase by about 10% year-on-year, with the growth rate of profits above the revenue growth rate.
lean management and value chain operation capabilities are constantly increasing. The company promotes the construction of industrial Internet, and the T+3 operating model is constantly optimized. On October 19, 2018, Midea released its own industrial Internet platform M.IOT. On November 22, Midea's industrial Internet platform was also selected into 72 industrial Internet pilot demonstration projects of the Ministry of Industry and Information Technology. At present, an Internet intelligent factory has been built in Nansha, Guangzhou and supports the effectiveness of the company's T+3 model. It is expected that the company will copy the Nansha intelligent factory model to other factories and gradually realize customized production capacity through the interconnection platform. At present, the full cycle of the T+3 model is ideally only more than ten days to complete the entire process of the product chain, and is in a leading position in the industry. The introduction of some of Kuka and Toshiba's businesses into Midea's supply chain is expected to bring about a reduction in costs, and Kuka and Toshiba's profitability is expected to be positive.
grasps the trend of consumption upgrading and continuously optimizes the product structure. In October last year, the company launched the colmo brand for the high-end market, benchmarking Haier Casarte. In the early stage, it mainly involved ice and washing and kitchen appliances, and in the later stage, it will create a full category. Colmo, as a high-end smart home, will become the company's top brand, and the proportion of mid-to-high-end products continues to increase. In 2018, the average market price of the company's air conditioner increased by about 10%; the average price of refrigerators increased by 20%, which has doubled compared with 2016; the average price of washing machines increased by 10%, and the average price of small appliances increased by between 5% and 10%. Product upgrades and average price increase are in line with the trend of consumption upgrading. Brand differentiation in 2019 will help improve profits.
internal integration strengthens internal strength, and performance is expected to benefit from the policy trend. The company merged the two major business units of kitchen appliances and water heaters. By acquiring Little Swan to integrate the washing machine business, building Midea Kuka Foshan intelligent manufacturing industry base, and introducing Midea supply chain into Toshiba's cost reduction internal integration actions will promote the company to respond more effectively to risks. The National Development and Reform Commission has promoted the implementation of consumption policies. The company, as the leader in all categories, has the most obvious policy to benefit. From 2009 to 2012, the demand for home appliances to go to the countryside and the old-for-new policy has entered the cycle of replacement (the life of home appliances is 8-10 years). It is expected that this round of stimulus policies will focus on home appliances and kitchen and bathroom appliances. The company's business integration is conducive to undertaking the national stimulus policy needs.
Risk warning: Business integration is less than expected; air conditioner inventory is large; real estate regulation effect uncertainty.
Qingdao Haier: D shares are issued to practice European business, and the high-end brand volume and price increase
Qingdao Haier 600690
Research institution: Shenwan Hongyuan Analyst: Zhou Haichen, Liu Zheng Date of writing: 2018-11-02
The third quarter report revenue growth rate meets expectations, and the net profit growth rate exceeds expectations after deducting non-operating items. In the first three quarters of 2018, the company achieved operating income of 138.139 billion yuan, a year-on-year increase of 12.77% (the merger scope is adjusted, the year-on-year is based on the adjusted figure, the same below), and the net profit attributable to shareholders was 6.127 billion yuan, a year-on-year increase of 9.35%, and the net profit attributable to shareholders was 5.522 billion yuan, a year-on-year increase of 17.62%, corresponding to EPS 1.005 yuan per share. The revenue growth rate is in line with expectations, and the net profit growth rate is slightly beyond expectations after deducting non-operating items.
market share has increased across the board, and Casarti has achieved remarkable results in leading high-end.1) By category: The company's revenue in refrigerators, washing machines, air conditioners, water heaters and kitchen appliances increased by 15.9%, 16.2%, 15.7%, 14.5% and 18.9% year-on-year respectively in the first half of the year. 2) By region: North America and Latin America maintained rapid growth in overseas markets, reaching 11.83% (USD revenue) and 55% respectively; South Asia, Europe and Japan increased by 24%, 21% and 10% year-on-year respectively. 3) By brand: The company's Q3 acquisition of New Zealand FisherPaykel, with revenue increasing by 7% year-on-year in the first three quarters (New Zealand dollars), of which 12% increased in the third quarter; high-end brand Casarte's revenue increased by 49% in the first three quarters, with market shares of refrigerators, drum washing machines and air conditioners above 10,000 yuan reached 36%, 77% and 42.7% respectively. Overall, the company's growth against the market leads transformation, and high-end drives both volume and price increase: Domestic sales benefit from the release of channel adjustment dividends, high-end market continues to expand its leading advantages, exports and consolidation continue to integrate high-quality assets, achieving brand breakthroughs in multiple regions.
cost control drives growth in gross sales gap, and business improvement continues to emerge. In the first three quarters, the company's overall gross profit margin was 28.93%, a year-on-year decrease of 0.97 pcts, mainly due to the reclassification of some logistics freight costs in accordance with the new revenue standards. The company's sales expense ratio decreased by 2.19 pcts year-on-year, and the gross sales difference increased by 1.22 pcts year-on-year to 13.48%; the management expense ratio increased by 1.37 pcts year-on-year (R&D accounts for 2.69% of revenue), and the financial expense ratio benefited from the decline of exchange profit and loss by 0.28 pcts. The company's net operating cash flow in the first three quarters was 11.049 billion yuan, although it decreased by 31.6% year-on-year, but it was still higher than the net profit in the same period. Business growth has led to an increase of 35.5% from the beginning of the year, and centralized collection of customers in the middle of the year has led to a decrease of 36.9% from the beginning of the year. However, we believe that the positive feedback from the company's channel has begun, and as the channel pushes forward, the company's operating efficiency will continue to improve.
builds an A+D capital market platform, and the globalization strategy is steadily advancing. The company issued 265 million D shares and 278 million euros in public on the China Europe International Exchange (according to the prospectus of D shares, of which approximately 147 million euros were used for asset mergers and acquisitions, 117.6 million euros in capacity expansion, 73.5 million euros channel expansion and brand building, and 29.4 million euros increased R&D investment), and officially built the "A+D" capital market platform. This move will help promote the implementation of the European strategy, build a local brand awareness, establish an overseas employee incentive platform, and build euro assets to better avoid exchange rate risks.
profit forecast and investment rating. As of the third quarter report disclosure, the company's controlling shareholder, Haichuangzhi, spent 679 million yuan to increase its holdings of 43.78 million shares of the company (accounting for 1.57% of the total share capital), with an average increase of 15.50 yuan per share, which is a higher premium than the current share price, demonstrating management confidence. We continue to maintain the company's net profit forecast for 2018-2020 to be 8.03 billion yuan, 9.24 billion yuan and 10.63 billion yuan, respectively, an increase of 16%, 15% and 15% year-on-year, corresponding earnings per share were 1.26 yuan, 1.45 yuan and 1.67 yuan, respectively, and corresponding dynamic price-to-earnings ratios were 10 times, 9 times and 8 times respectively, maintaining the "buy" investment rating.
Gree Electric Appliances' 2019 performance forecast comment: 200 billion revenue has been successfully concluded, and performance has been stored for winter
Gree Electric Appliances 000651
Research Institution: Shenwan Hongyuan Analyst: Zhou Haichen, Liu Zheng Date of Writing: 2019-01-18
200 billion revenue has been successfully concluded. Gree Electric Appliances released its 2018 performance forecast, with annual revenue of 200 billion to 201 billion yuan, a year-on-year increase of 33%-34%, and net profit attributable to shareholders of 26 billion to 27 billion yuan, an expected year-on-year increase of 16%-21%, corresponding to earnings per share of 4.32 yuan per share. Among them, the fourth quarter revenue was RMB 51.3-52.3 billion, an increase of 37%-40% year-on-year, and the net profit attributable to shareholders was RMB 4.9-5.9 billion, a decrease of 14%-29% year-on-year. At the same time, the extraordinary general meeting of shareholders completed the election, and Dong Mingzhu was re-elected as chairman.
air conditioning business is progressing rapidly, and the short-term highlights are moving towards multiple categories. 1) From the perspective of business split, air conditioners continue to contribute to the main growth, with revenue expected to increase by about 35% year-on-year. Considering that the industry online data mainly calculates the production and sales of downstream whole machine factories through the upstream compressor and component companies, it fails to reflect the changes in the actual sales and channel pressure data of the company, and the company's actual shipment growth is expected to be higher than the sales growth from January to November statistics by Industry Online. We expect sales and average price increase to contribute 20% and 15% respectively.2) How to view the inventory pressure in the air conditioning industry? According to industry online statistics, as of the end of November, the inventory of the air-adjusted industry was 41.9 million units, a decrease of 700,000 units for the first time on the month-on-month. Among them, the factory inventory was 9.25 million units slightly increased, mainly due to the Spring Festival inventory at the end of the year + foreign trade export orders to grab orders, and the channel inventory was 32.65 million units, a decrease of 1.1 million units month-on-month, indicating that the industry as a whole is starting a destocking cycle. Judging from Gree's own performance, the retail growth rate since the fourth quarter has been higher than the growth of domestic sales shipments, which may indicate to a certain extent that the inventory pressure has slowed down. 3) Looking ahead to 2019, we continue our previous judgment that after the industry has experienced two consecutive years of channel inventory replenishment cycle, terminal sales and real estate pull, it may usher in moderation in 2019. However, the concentration of leading markets has increased and household appliances (small appliances, refrigerators and washing machines) has continued to make efforts after acquiring Jinghong. Even without considering the stimulus of potential home appliance policies, it is expected to maintain a revenue growth of 0%-5%.
Board of Directors’ change of leadership is implemented, and performance is stored for winter. 1) Corporate governance uncertainty has been eliminated. Dong Mingzhu was successfully re-elected during the board of directors, starting the third term of chairman, which to some extent eliminated the uncertainty of corporate governance. The company promised to maintain an annual performance growth of 10% in the future. We believe that it will help alleviate the market's medium- and long-term profit growth concerns. 2) If you have food in your hands, you are not panicked. According to the company's performance forecast, the annual net profit margin attributable to shareholders is about 13%, and is expected to decline by 1.9 pcts year-on-year. We judge that the main reason is that sales expenses are large in the fourth quarter, which to a certain extent leaves room for maneuver for the growth of net profit in 2019.
lowered its profit forecast and maintained its buy investment rating. As of the third quarter report, the company's cash assets (monetary funds + other current assets + notes receivable) were 170.5 billion yuan, and the family was well-off. Considering that domestic commercial housing sales continue to be sluggish, and the sales pressure of air conditioners will be high next year and next year, we lowered our net profit in 2018 to 2018 to 26.1 billion, 28.8 billion and 31.8 billion (original values were 29 billion, 32.2 billion and 35.7 billion), an increase of 16.3%, 10.4% and 10.6% year-on-year respectively, corresponding to EPS of 4.33 yuan, 4.78 yuan and 5.29 yuan (previous values were 4.82 yuan, 5.29 yuan and 5.81 yuan), corresponding to dynamic price-to-earnings ratios of 9 times, 8 times and 7 times respectively, with a high implied dividend yield, and maintaining the "buy" investment rating.
Hisense Home Appliances: It plans to merge Hisense Hitachi, which is expected to fully benefit from the development dividends of the central air-conditioning industry
Hisense Home Appliances 000921
Research Institution: GF Securities Analysts: Zeng Chan, Yuan Yuchen, Wang Chaoning Date of Writing: 2019-03-08
Announcement to acquire 0.2% of Hisense Hitachi's equity and include Hisense Hitachi in the scope of consolidation
On the evening of March 5, 2019, Hisense Home Appliances issued an announcement to acquire 0.2% of the equity of Qingdao Hisense Hitachi Air Conditioning System Co., Ltd. (Hisense Hitachi) held by United Trade for RMB 25 million. After the completion of this equity transfer, the company will hold 49.2% of Hisense Hitachi's shares. While becoming its largest shareholder, it also plans to include Hisense Hitachi in the scope of the company's consolidated financial statements. This move will help improve the company's assets, revenue and cash flow scale, and rely on the good profitability of Hisense Hitachi Central Air Conditioning Business to improve the company's overall gross profit margin level.
Hisense Hitachi is the leader in the domestic multi-online market for central air conditioners, contributing generous investment returns to the company
Hisense Hitachi was established in Qingdao in 2003 by Hisense Group and Hitachi Air Conditioner. Its main product is multi-online market share and is the sub-category with the largest and most promising development prospects. According to statistics from the "HVAC Central Air Conditioner", the multi-online market size reached 44.5 billion in 2018, and the industry's compound growth rate from 2015 to 2018 was as high as 18%.
Relying on Hitachi's advantages in technology, products, production and Hisense's experience in domestic channel expansion and management, Hisense Hitachi has developed into a leading domestic multi-online market. Data from "HV Central Air Conditioning" shows that the total retail sales share of Hisense, Hitachi and York brands in the multi-online market in 2018 was 19.5%, second only to Daikin. It has ranked second in most online industries for many years and has a stable market position.
Based on the good growth of the multi-online market and the stable leading position of Hisense Hitachi, the investment income contributed by Hisense Hitachi has become an important part of the company's profit in recent years.From 2015 to 2017, Hisense Hitachi contributed investment income of 397 million, 571 million and 732 million to the company, accounting for 68%, 52%, and 61% of the company's net profit attributable to shareholders (in 2017, the net profit attributable to shareholders was excluded from the non-recurring gains and losses generated by the sale of its subsidiary Baohong Property). If the merger is completed this time, the company is expected to benefit more fully from the development dividends of the multi-online market of central air conditioners.
Investment advice
Although the downward trend in the real estate cycle has led to a slowdown in the growth rate of the central air conditioner market in 2018, due to the low household penetration rate, we are still optimistic about the long-term development prospects of the central air conditioner market. At the same time, we believe that Hisense Hitachi's leading advantage in the multi-online field will still maintain. Since the acquisition has not yet been completely over, the impact of consolidation will not be considered yet. We expect the company's net profit attributable to shareholders from 2018 to 2020 to be 1.46 billion yuan, 1.62 billion yuan and 1.8 billion yuan. The latest closing price corresponds to the valuation of 8.7xPE in 2019, which is still lower than the average level of the home appliance industry, and there is room for restoration of the valuation. However, under the influence of the post-cycle real estate industry, whether the company's traditional white goods business can improve and the development of central air conditioning business will remain to be seen in the short term. The company is given a reasonable value of 11.90 yuan per share, corresponding to the valuation of 2019 of 10xPE, and maintaining the "overweight" rating.
Risk warning
Central air conditioner penetration rate increased less than expected; real estate sales were down; terminal consumption continued to be weak.
Boss Electrical Appliances: Revenue growth slows down, expense investment increases layout in the future
Boss Electrical Appliances 002508
Research Institution: GF Securities Analysts: Zeng Chan, Yuan Yuchen, Wang Chaoning Writing date: 2019-02-28
Revenue and performance pressure have increased quarter by quarter, and the overall growth is in line with expectations
Company released its 2018 annual performance report: FY Company achieved revenue of 7.48 billion yuan (YoY+6.6%) and achieved net profit attributable to shareholders of 1.48 billion yuan (YoY+1.4%), corresponding to net profit margin of 19.8% (YoY-1.0pct); among them, the revenue in Q4 was 2.09 billion yuan (YoY+2.9%) and achieved net profit attributable to shareholders of 470 million yuan (YoY-6.3%), corresponding to net profit margin of 22.5% (YoY-2.2pct).
Demand is not strong under the influence of real estate, and the increase in expense investment may drag down profitability in the short term
Home appliances as a post-cycle industry continues to be affected by real estate. Since 2018, the demand for kitchen appliance terminals has been weak, the industry competition has gradually increased, and the room for increasing the retail price of products has been suppressed, resulting in slowing growth rates in different degrees of industry companies. From the company's perspective, data from Zhongyikang shows that the year-on-year growth rate of the average price of FY boss's range hood and gas stove in 2018 was 0.4% and -0.4%, respectively, which has rarely seen a growth rate of nearly 0 in recent years, resulting in the continued sluggish revenue growth rate in Q4, a month-on-month decrease of nearly 3.0pct; at the same time, from the trend in the first three quarters, the company's attention to new products such as embedded is still increasing, and R&D expenses are gradually increasing, reaching 71.42 million (YoY+28.4%) in the first three quarters, which may have a drag on profitability in the short term, but it is expected to continue to improve the company's competitiveness in the future.
The industry characteristics may gradually change, and its leading position still has an advantage
After experiencing many offline and online channel expansion dividends, how to improve product strength, create and capture consumer needs will become a new proposition for kitchen appliance companies. In the future, the main battlefield of industry competition may be transferred to the deep cultivation of the stock market of old products and the rapid occupation of the incremental market of new products. As a leading company in the industry, Boss Electric Appliances has strong financial strength and channel advantages. As the company's emphasis on the product side continues to increase, the Matthew effect brought by the company's leading advantages is still expected to be maintained.
Profit forecast
is expected to be 1.48 billion yuan, 1.55 billion yuan from 2018 to 2020, with year-on-year growth rates of 1.4%, 4.7%, and 7.9%, respectively. The latest closing price corresponds to 15.5x in 2019. In the short term, the company's valuation has approached a reasonable level. Considering that as some demand driven by real estate gradually stabilizes, the kitchen appliance industry still has room for growth in the long run. At the same time, the Matthew effect brought by the company's leading position will continue when the industry enters a new normal. It is expected that the valuation will be repaired after switching to 2019. We give the company a reasonable value of 26.1 yuan per share, corresponding to the PE in 2019 of 16x, which is the same level as the static PE in 2018, and maintain the "overweight" rating.
Risk warning
Raw material prices rose; new product development was lower than expected; real estate continued to be sluggish.
