Gujia Home (603816): Endogenous growth, beautiful big home continues to move forward
Investment Highlights The company released its 2018 report: Reporting and Realizing Revenue 91.7.2 billion (+37.61%); net profit attributable to mother 9.8.9 billion (+20.29%); deduct non-net profit 8.18 billion (+34.05%).Among them, Q4 achieved revenue of 27 in a single quarter.80 billion (+52.91%), net profit attributable to mother 2.4.0 billion (+0.68%), deducting non-net profit 1.81 billion (+33.09%).The company plans to distribute a cash dividend of 10 for every 10 shares.0 yuan and increased 4 shares, the dividend ratio reached 43.5%.  A number of businesses have developed in an all-round way, and the company’s production capacity has gradually been released: in terms of business, the company’s sofa revenue is 51.44 billion (+39.31%) and gross margin of 34.87% (-1.59 points); Bedding 11.32 billion (+27.80%), gross profit margin 38.23% (+0.01pct); supporting products 12.9.2 billion (+32.09%), gross profit margin of 26.20% (-0.34 points); dining chair 3.18 billion (+20.54%), gross margin 28.51% (-1.38 points); custom furniture 2.12 billion (+145.77%), gross profit margin 29.96% (+3.10 points); mahogany furniture 1.58 billion (+40.07%), gross profit margin 13.95% (+0.49pct); information technology services (+90.81%), gross profit margin 87.31% (-6.03pct).The decline in the gross profit margin of sofas and dining chairs was mainly due to the increase in raw material prices.The main construction of the Jiaxing Wang Jiangyao project has almost come to an end. It is estimated that the annual production capacity will be 600,000 standard sets of software furniture and the annual revenue will be 28.8 billion; the Central China (Huanggang) project has started infrastructure construction and is about to be completed by the end of 19th. It is expected to achieve an annual production capacity of 600,000 standard sets of software furniture and 400 universal custom home products, and achieve an annual operating income of about 3 billion.  Channel expansion is rapid and market expansion depth: from the perspective of domestic and 杭州桑拿 foreign sales channels, domestic sales have achieved revenues of approximately 5.2 billion (+29.1%), export sales realized revenue of about 35 billion (+56.7%).In terms of domestic sales, the company, while achieving multi-stores and multi-site layouts in one city, deeply explores the third- and fourth-tier cities, integrates stores, actively explores multiple channel models and channel forms, and increases the development of department stores such as Wanda.Research, lean towards large stores, fusion stores, flagship stores.As of the end of the reporting period, the company had a total of 6076 stores. In 2018, it opened 1,141 new stores, including 207 own-brand direct sales stores, 4015 own-brand distribution stores, and 1,854 other brand stores.  Decentralized mergers and acquisitions have blossomed, helping all-round layout: The merged company reportedly made the following equity investments: (1) Acquired German high-end brand Rolf Benz 99 for 42.73 million euros.92% equity, sharing European and Chinese channels; (2) Acquiring 51% equity of Natuz for 65 million euros, adding high-end and mid-to-high-end two brand series (Natuzzi Italia and Natuzzi Editions), and improving the company’s space design,Competition for key performances such as product R & D and manufacturing, terminal retail management; (3) Take 4.2.4 billion acquisition of 51% equity of Quanzhou Xibao Home Furnishing, enhancing mattress business competition and obtaining raw materials supply of sponges and latex; (4) acquiring 60% equity of Banerqi custom furniture for 36 million yuan, and acquiring Cavan for 51 million yuanHome 51% equity to 2.10,000 yuan to purchase 100% equity of Priority Home; (5) to 5.US $ 9.8 billion indirect acquisition of actually Home1.6451% equity, deepening C-side cooperation.In 18 years, Rolf Benz, Natuz, Xibao Home Furnishing, Banrqi, Cavan Home Furnishing, Priority Furnishing each contributed and consolidated income3.15 billion, 1.16 billion, 0.65 billion, 0.7.8 billion, 0.3.3 billion, 3.100 million, a total of about 9.200 million; the total profit contribution contributed about 20 million.After excluding the impact of consolidation, the company’s endogenous income / profit growth rate was 24% / 18% in 18 years, of which the growth rate of endogenous income in the single quarter of 18Q4 was about 20%.  Automation promotes efficiency improvement, and the advantage of scale is prominent: affected by the increase in raw material prices and exchange rate changes, the company’s gross profit margin is 36.37% (-0.89pct).  Established a company to improve work efficiency and develop automated production through “VSM” and uniform distribution. Gradually, 18 years of wood production, wooden frames, and holsters went out, greatly reducing labor costs.Total period expense ratio 23.93% (-0.81pct), of which sales expenses were 19.50% (-1.46pct), the scale benefits of advertising and channel construction costs are gradually significant; management + R & D expense ratios total.15% (+1.1 pct), due to increased training and research and development investment; financial expenses 0.28% (-0.44pct).The company’s equity incentive expenses in 2018 were 0.9.1 billion, of which sales expenses, management expenses, and research and development expenses were shared separately.4.1 billion, 0.4.6 billion, 0.4.0 billion shares paid.Taken together, the company’s net profit attributable to the parent is 10.79% (-1.55pct).  Mergers and acquisitions have put pressure on receivables, and multiple measures have been taken to strengthen supply chain management: the company’s operating cash flow.10 billion (-11.87%), mainly due to the increase in procurement expenditure as the scale of sales increased, and increased investment in training research and management capabilities.Accounts receivable of the company 9.32 billion yuan (+ 118%). The increase was mainly due to the merger and consolidation scope of the accounts receivable of the merger and acquisition company, and the turnover days of accounts receivable increased by 5.93 days to 26.69 days.Inventory turnover days decreased by 4.29 days to 62.94 days, benefited from the company’s expectations in the supply chain operation: continue to cut into and adjust the export manufacturing business to increase 19%; at the same time promote the factory MRP on-line projects, plan material coordination projects, complete distribution projects, planning and material managementSome progress has been made.  The large home strategy has steadily landed, and the extension layout has promoted long-term development: through the gradual development of the large home strategy, the company’s category integration effect has increased, optimistic about the company’s customization, mattresses, functions, and fabric categories.Brand effects, continued to contribute to growth; channel expansion of wolf, continued to sink to the third and fourth tiers; the falling prices of raw materials MDI / TDI are good for gross margin repair, and we are optimistic about the company’s competitiveness and expansion.  Earnings forecast and investment grade: We expect the company to achieve revenues of 110 to 19-21 years respectively.20/132.60/159.96 ppm, an increase of 20 in ten years.1% / 20.3% / 20.6%.Net profit attributable to mother 11.43/13.75/16.3.2 billion, an annual increase of 15.6% / 20.3% / 18.6%.The current market capitalization corresponds to a PE of 21-21 years.03X / 17.48X / 14.74X, maintain “Buy” rating.  Risk warning: Real estate growth exceeds expectations, store expansion is less than expected.