Vantage Holdings (002035) Company In-depth Research Report: Category Expansion Is Making Efforts While Channel Reform Is Underway

Vantage Holdings (002035) Company In-depth Research Report: Category Expansion Is Making Efforts While Channel Reform Is Underway

Vantage Co., Ltd .: a stove leader with broadened business scope, optimized governance structure, and steady progress in strategic transformation.

  Vantage has changed its strategy of “high-end smart kitchen appliances” since it replaced the actual controller and updated its operating team in 2014, and has promoted the company’s transformation and upgrade in terms of products, brands, channels, and governance structure. The scope of business has evolved from the original stove toSmart kitchen appliances + bathroom products + overall kitchen product matrix; brand image is upgraded to high-end, stylish, younger; equity structure is gradually concentrated and long-term incentive mechanism is introduced; adhere to channel sinking and channel type expansion; optimize processes to improve production efficiency, etc.

The strategic transformation has achieved initial results. After 2015, the company’s average product price increased, operating efficiency improved, revenue and profit growth accelerated, and gross and net profit levels increased significantly.

  Kitchen appliances industry: still breakthrough market space, high-end becomes a development trend.

  In the short term, kitchen appliances are the sub-sectors most closely related to real estate in the home appliance sector. Historically, the performance of the sector is highly correlated with the completion of real estate.

Since 2018, the sales of kitchen appliances have been affected by the downturn in real estate, and revenue has increased significantly. In the future, it is expected that the completion of the recovery will lead to an upward cycle.

  In the long run, the current number of kitchen appliances is still low, and the number of rural households is much lower than that of cities and towns. With the increase of the urbanization rate, the number of kitchen appliances will further increase; replacing new types of kitchen appliances such as ceramics, etc.During the period of rapid growth, the overall competitive landscape has not been reorganized, and the share of international brands is relatively high. This translates into the gradual expansion of new categories in the domestic market and the addition of more domestic brands to the new product layout. Domestic brands are expected to usher in new growth in the industry and domestic substitutionAdvantage.

  Vantage’s growth space and profitability: Channels improve profitability and products create growth space.

  1) Changes in channel structure and transformation enhance profitability.

Vantage’s channels are mainly divided into offline, online, engineering and overseas channels, of which online channels have the highest gross margins, followed by offline, engineering and overseas channels. Through the development of the Internet and the rise of new media, e-commerce channelsIncreasing the proportion will increase the overall profit margin. In addition, Vantage has been promoting retail transformation reform since 2018, and has started to establish a distribution management platform for monitoring and management to optimize the inventory structure, improve terminal operation efficiency, and offline channel transition.Gradually further reduce costs and increase efficiency, and improve profitability.

  2) Traditional smoke stove business is picking up, and new categories of heating and embedded products will contribute new growth points.

The demand for traditional smoke stoves is highly correlated with the real estate cycle. After the growth of real estate sales and completion rebounds in the second half of 2019, residential units (especially second and third tiers) with extended delivery in the early stage will gradually usher in centralized delivery.The demand for traditional smoke stove products will benefit from the improvement in real estate.

In addition, Vantage will replace combustion as the second major development category in 2018, cooperate internally to expand technology investment, adjust production lines and marketing systems, benefit from external coal-to-gas policies, and promote high growth in combustion promotion; dishwashers and otherThe new embedded categories 杭州桑拿网 have achieved double-digit high growth in the context of the sluggish industry and the expansion of traditional categories. Vantage’s focus on embedded products such as tablet PCs will benefit from the industry’s growth dividend and continue to grow well.

  Profit forecast and estimation
2021 operating income from 62.



7.7 billion to 57.



5.0 billion, the previous growth rate -4.

9% / 14.

3% / 11.

76%; net profit attributable to mother is from 7.



8.6 billion adjusted to 7.



70 ppm, a ten-year increase of 7.

05% / 23.

96% / 19.


EPS is 0.



23 yuan, corresponding to the current expected PE multiple of 13.

45 times.

  The company’s channel standardization continued to advance, and the product departments coordinated the construction of a management system. 无锡桑拿网 In the future, the company’s cost management and control capabilities will be further strengthened, channel and product operation efficiency will continue to improve, and profitability will be promoted.The company’s existing technological advantages and channel advantages, increasing land suppression factors to improve demand gradually pick up, is expected to bring greater growth space for the company.

The current company is estimated to be less than 13 times, considering that the industry’s major comparable companies predict that PE will be about 15 in 2020?
17 times, and with the recovery of the real estate industry forecast gradually repaired, giving the company 15 times PE in 2020, based on 2019?
EPS is 0 in 2021.



23 yuan performance forecast, target price of 15.

45 yuan, the rating was adjusted from “overweight” to “buy”.

  Risks indicate a stalled macroeconomic growth or tightened real estate policies, intensified industry competition, and the expansion of new categories has fallen short of expectations.

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