Huida Sanitary Ware (603385): Smart and national sanitary ware brand help the rise

Huida Sanitary Ware (603385): Smart and national sanitary ware brand help the rise

Huida Sanitary Ware: a national sanitary ware brand that has been engaged in sanitary ware for more than 30 years, and a one-stop comprehensive solution provider of sanitary products.

The company has been engaged in the sanitary industry for more than 30 years. Currently, it has two own core brands, “Huida” and “Duffini”. It has the largest ceramic sanitary industry in China.

Sales revenue in 201727.

48 ppm, net profit 2.

2.7 billion, 2012-2017 revenue, the compound growth rate of net profit attributable to mothers was 9 respectively.

16%, 14.

77%.

Sanitary industry: The scale of the industry has grown steadily, and the industry has become more integrated and intelligent.

The demand for sanitary products has gradually increased, and the decoration of houses and the replacement of sanitary ware in urban households have gradually increased. The market size has grown steadily. In 2018, the market size of sanitary products was US $ 173.2 billion, an increase of 2%.

49%, the growth rate has stabilized.

The concentration of the industry is on the rise, CR3 increased from 24% in 2009 to 38% in 2017, but the concentration level close to 90% of Japan’s CR3 can only replace the upside.

Kohler, TOTO, Wrigley, Huida, Hengjie CR5 are 45.

6%, mid- to high-end products are controlled by foreign brands, and domestic brands have only a certain gap.

Local competition and foreign exploration are still very fierce.

Huida Sanitary Ware: omni-channel operation helps the company’s development, and the overall layout and intelligent direction of overweight layout.

1) Channel marketing, channel sinking and B-side large client expansion are important directions.

The company has an omni-channel marketing system combining online and offline, covering standard specialty stores, KA stores, e-commerce channels, engineering channels, Internet home improvement and inter-industry alliances and other channels, and is exported to overseas markets; Huida brand specialty stores exceed2900, county-level cities cover more than 70%.

With the support of the “Toilet Revolution” policy and the trend of concentrated purchases by large real estate customers, the company will continue to increase market share through channel sinks and real estate large customer expansion.

2) The overall and intelligent direction of overweight layout: The company follows the industry development trend and policy direction, and establishes Huimi Technology and Huida to live, and overlays intelligent bathrooms and complete bathrooms to create China’s leading sanitary bathroom enterprises.It is under construction and is expected to be put into production this year. New business is expected to help the company achieve rapid growth.

Investment suggestion: The company has been cultivating sanitary wares for more than 30 years, and the “Huida” brand has become a higher market awareness.

After the listing, the company will quickly expand its omni-channel marketing layout and capacity building. The distribution end-stores will be upgraded and the channels will be actively covered to cover the blank areas. The project will focus on the development of large real estate customers. The production capacity will be actively expanded to ensure expansion.

Intelligent and self-contained bathrooms open up new market space and help long-term development.

We estimate that the company’s net profit attributable to its parent from 2018 to 2020 will be 2.

5, 3.

0 and 3.

50,000 yuan, the corresponding EPS is 0.

68, 0.

81, 0.

95 yuan, corresponding to 15 for PE.

0, 12.

6, 10.

8 times; 无锡桑拿网 the first coverage is given a “buy” rating.

Risk reminder: risk of fluctuations in the real estate industry, market competition risks, exchange rate risks, anti-dumping risks