Jiuyang Shares (002242): Revenue Returns to Double-digit Growth Positive Changes Continue
Event: Jiuyang shares released the 2018 annual report, with a total operating income of 81 in 2018.
700 million, +12 a year.
7%, net profit attributable to mother 7.
500 million, ten years +9.
5%, EPS is 0.
The company also disclosed: 1) the 2018 dividend distribution plan; 2) 2019 related party transaction estimates.
The company’s revenue returned to double-digit growth in 2018, and the company’s new product launch conference in 2019 showed brand new ideas, design concepts and product series, which were widely recognized.
From the comprehensive tracking of the company, 19 years of positive changes have continued to occur.
We will first analyze the company’s annual report performance, and then merge. From our tracking point of view, why the positive changes of Jiuyang in 19 will continue to occur.
1. Analysis of annual report: operating well, revenue returning to double-digit growth. Performance and dividends are in line with market expectations. The 19-佛山桑拿网year related transaction is expected to show synergistic results. The total revenue for the fourth quarter of 2018 was 27.
3 ‰, +25 a year.
1%, because some e-commerce companies delayed the delivery of goods from 18Q3 to 18Q4, if taken into account, the total operating income of 2018H2 increased by +13.
8%, the growth rate is higher than 18H1 (+11.
3%), a slight increase, benefited from one-time investment income, single-quarter profit growth rate is also faster.
Earlier results have been released, in line with market expectations.
Total operating income for 2018 was 81.
700 million, +12 a year.
7%, after 2016-17 adjustments and attempts, the company’s “value marketing” strategy began to bear fruit, revenue returned to double-digit growth, and net profit attributable to mothers in 2018.
500 million, ten years +9.
5%, due to marketing and channel expansion, profit growth is slightly lower than revenue growth.
The company’s annual dividend plan is to pay a cash dividend of 8 yuan (including tax) for every 10 shares and a cash dividend rate of 81.
4%, if the total cash paid for share repurchase is added, the cash dividend rate in 2018 will reach 84%. The company continues to maintain a high dividend policy, which is in line with expectations.
In addition, the company announced its 2019 related-party transaction forecast, of which Jiuyang is expected to sell goods to SharkNinja4.
50,000 yuan (1 actual sales in 2018.
900 million), reducing overseas demand for SharkNinja.
The Jiuyang subsidiary Shangkeningjia (China) is expected to purchase 60 million yuan from SharkNinja (actually purchased 23 million yuan in 2018) for the sale of Shangkoningjia (China) in China.
Shanghai Lihong accelerates the coordinated development of two major business entities, Jiuyang and SharkNinja.
Revenue analysis: Domestic sales resumed double-digit growth, and export sales became a new growth point. Total operating income in 2018 was 81.
700 million, +12 a year.
7%. After 2016-17 adjustments and attempts, the company’s “value marketing” strategy began to bear fruit, and revenue returned to double-digit growth.
In terms of products, the major product categories in 2018 all achieved good growth.
Food processor revenue 34.
1 ‰, +8 a year.
2%, mainly due to the rapid growth of wall breaking machines.
Income from nutrition pot 27.
4 ‰, +18 a year.
7% of which contributed revenue1 to the Foodi series exported by Ninja1.At 88 ppm, the revenue of products based on rice cookers and pressure cookers increased by about 11%.
Western-style small household appliances income 10.
USD 800 million, with an expected increase of 21%, of which water purifier revenue increased 51% to 2.
Induction cooker income 6.
6 trillion, basically the same as in 17 years, Shang Koning family (China) contributed 20.30 million yuan in other business income.
By region, domestic sales resumed double-digit growth, and export sales became a new growth point.
The company’s domestic sales / export revenue in 2018 were 78.
9 ‰, +11% / + 102% for one year, of which export revenue is mainly affected by sales of connected transactions to SharkNinja1.
The pull of 8.8 billion was concentrated in the second half of 2018.
With the coordinated development of Jiuyang and SharkNinja, export revenue will become a new growth point.
Profit analysis: Breakthroughs in investment in brand and channel upgrades, effective hedging of asset disposal gains are affected by product structure and new export products, and gross margins have declined slightly.
The company’s short-term gross profit margin in 2018 was -0.
9pct, from the perspective of categories, the first is that the gross profit margin of food processing machines due to changes in product structure1.
6pct, the proportion of revenue of wall breakers with a lower gross profit margin than soybean milk machines is rising rapidly.
The 18H2 gross profit margin of nutrition pot is slightly tilted by the initial gross profit margin of the new Ninja Foodi series.
The gross profit margin of western-style small household appliances rose sharply2.
The transformation of Jiuyang to “value marketing” requires the upgrade of brands and channels, and it is essential to realize them as soon as possible, because the CCTV national brand plan, World Cup advertising and channel support, etc., the company’s sales expenses in 2018 increased by 2 compared with 2017.
800 million, the sales expense ratio increases by 1 every year.
8pct, the management expense ratio and R & D expense ratio are -0 respectively.
16pct / -0.
04pct, as a result of the sale of factories and the government’s collection of land generated non-current asset disposal gains1.
96 ‰, the average net interest rate fell only slightly.
3 points to 9.
Due to the resumption of growth and the enthusiasm of the dealers to pick up the goods, the company’s advance receipts of invoices increased by more than 196% at the end of 2018. At the same time, the company’s increased stocking resulted in a 45% increase in inventory, and credit was granted to some dealers, resulting in an increase in bills receivables and accounts receivable by 40%, The changes in the three items are due to the company’s good business.
2. Positive changes: breakthrough growth, breakthroughs in operation, continuous improvement in focus on core categories, and improvement in the conversion rate of innovation results. In the past, innovation results continued, but the conversion rate was low.
Product innovation is the core competence of Jiuyang. Strong internal product innovation approaches are aimed at new products. However, the efficiency of the past innovation results into operating results is low. We believe that there are two main shortcomings: 1) Subversive innovation is concentrated in non-coreCategory / pain point, consumers’ attention is reduced, applauding is not good; 2) single product innovation is the main, innovation cannot form the overall potential energy.
Focus on the core pain points of core categories, and transform innovation and progress efficiently.
Beginning in 18 years, innovations such as no-clean and one-pot dual-use have really hit the core pain points of core categories (soymilk machine / rice cooker / wall breaking machine), driving the company’s unit price of more than 1,000 yuan to account for more than 20% of sales. 19 yearsProduct innovation still focuses on core categories, applying horizontally the no-clean function, solving core pain points, and promoting the efficient transformation of innovation results into business results.
Systematize design and publicity to help brand transformation and upgrade. Serialized design and “Jiuyang Orange Ring” enhance brand awareness.
The new brand of “Yuexiang Health” is recognized. For the serial design of different circle consumers, the presentation of “Jiuyang Orange Ring” on all products and publicity will help to form a unified while satisfying different user preferences.Brand sense, enhance consumers’ overall awareness of Jiuyang brand.
The Jiuyang brand is committed to achieving transformation and upgrading.
The company ‘s revenue in the wall-breaking machine and double-cooker has been comparable to that of the soymilk machine. The transition from “Jiuyang = Soymilk Machine” to “Jiuyang = Quality Living Small Home Appliances” has gradually come to fruition, coupled with the continuous deepening of value marketing,Jiuyang is leading the industry in its youthful and fashionable upgrade.
Support dealers to become bigger and stronger. The channel enters the positive feedback cycle. The channel adjustment is reflected in the improvement and the channel system is expected to enter the positive feedback cycle.
Expansion. After the previous channel adjustments, the less motivated dealers were eliminated, and the coverage of high-quality dealers increased. The company has encouraged dealers to expand their own channels since 2018, providing a lot of supplements and guidance to support dealers to become bigger and bigger.Strong.
The growth rate of offline channels resumed quarter by quarter, and dealer operations are expected to enter a positive feedback cycle.
Expansion of own channels and advertising will continue.In 2018, there were more than 50 Shopping Mall stores, 250 brand stores, and several specialty stores. In 19 years, the company plans to continue its own channel expansion at the pace of 18 years, supplemented by active advertising and channel support.
After 18 years of success, dealers are expected to have strong investment expectations and will fully cooperate with the company to deepen its own channel layout.
The synergistic development with SharkNinja is expected to become a new growth point The synergistic development of Jiuyang and SharkNinja will become an important growth point in 19 years: 1) Export: After the successful cooperation of Ninja Foodi in 2018, SharkNinja will continue to advance Jiuyang to expand the kitchenElectrical products, sales of related party transactions in 2019 are expected to reach 4.
5 ppm, a year-on-year increase of 137%; 2) Domestic sales: In 18 years, SharkNinja was in the layout of outlets in China. After the number of outlets reached a certain scale in 19 years, the company will expand its advertising and launch new products such as “hand-held suction” vacuum cleaners.It will rapidly expand its market influence and revenue. In 2019, the purchase of related party transactions is expected to reach 6000 million, an increase of 160%.
In 2017, the company’s controlling shareholder completed the acquisition of the American vacuum cleaner TapSharkNinja, taking a step towards global layout. While adhering to the development strategy of “Positioning the Kitchen and Upgrading the Kitchen” of the Jiuyang brand, the controlling shareholder is expected to expand through the global map and make a breakthrough in China.The growth rate of the small kitchen appliances market, at the same time, through the coordinated development of overseas resources and Jiuyang shares, to provide Jiuyang shares with new growth momentum.
3. Performance Outlook: Revenue is expected to return to double-digit stable growth. Revenue Outlook: Through the company’s product and brand upgrades, innovation results are accelerating to be transformed into operating results, and after the initial adjustment and 18-year success, the channel is expected to cooperate fully.The company deepened the layout of its own channels and pushed the company’s traditional categories back to the growth track.
In addition, the coordinated development with SharkNinja will contribute new growth points.
We expect the company’s revenue to still achieve 10% + growth in 2019.
Net profit outlook: The increase in the proportion of high-price single-product revenue is expected to push up the company’s gross profit margin. Although the company will continue to supplement brand advertising and channel support, the decrease in World Cup advertising has continued to reduce the sales expense ratio.Recurring income is expected to lead to a higher profit base. It is expected that the growth rate of net profit attributable to mothers in 19 years is expected to be slightly lower than the growth rate of income.
The performance evaluation indicators of the company’s annual stock incentive plan in 2019 are: at least extended to not less than 11% in 2019, and the net profit exceeding the conversion rate of not less than 8% in 2019. We expect that the management team will be able to complete the assessment target with a high probability.
Profit adjustment, estimation and rating After 2016-17 adjustments and trials, the company’s “value marketing” strategy began to bear fruit, and revenue in 2018 returned to double-digit growth.
From the comprehensive tracking of the company, 19 years of positive changes have continued to occur, product and brand upgrades have accelerated, and the channel has entered a positive feedback cycle, which is expected to drive the company’s revenue back to a two-digit stable growth track.
Maintain 2019 EPS forecast to 1.
24 yuan, plus EPS forecast for 2021 is 1.
41 yuan, corresponding to PE is 21/19/16 times, assuming that the cash dividend rate remains above 80%, the corresponding current company dividend rate is close to 4%, with sufficient margin of safety.
At the same time, the company broke through growth in the channel and product side, and returned to the stable growth track of two figures. The market re-understands the company’s high-quality consumer goods company attributes. There is a possibility of revaluation of the asset value, and it is upgraded to a “buy” rating.
Risk warning: 1. Domestic demand is less than expected; 2. Localization of new brands is slow; 3. Market competition is intensified.