Bull Group (603195): Expansion of civil electric king is expected!

Bull Group (603195): Expansion of civil electric king is expected!

I. Company OverviewHistory: The Bull Group emerged from the converter business and continued to expand.

In 1996, a socket-type push-button switch was innovatively introduced, which has been used in the industry so far; it has subsequently entered the field of switch switches and sockets with high innovation potential and low concentration, LED lighting and digital accessories.

  Ownership structure: The structure is clear and the shareholding is concentrated. The brothers Ruan Liping and Ruan Xueping together control the issuer 96 in total.

961% of voting rights.

  Revenue structure: Converters accounted for more than half, and new business accounted for a rapid increase.

The proportion of converters / wall sockets / LED lighting / digital accessories has been converted from 70% / 25% / 1% / 0% in 2015 to 50% / 31% / 11% / 4% in 2019H1.

  Performance: Continued high growth, replaced the “new national standard” upgrade, 2017 performance changed, and 2018 resumed growth. The company’s 2015-2018 revenue, net profit CAGR reached 27%, 19%.

Second, socket switches: continuous innovation, deep barriers. Market scale: converters, switches, switches and sockets have a scale of nearly 20 billion, with steady growth.

In 2018, the converter market size was about 17 billion, exceeding 5-10%; the wall opening socket market was nearly 20 billion, exceeding about 10%.

In the future, the demand for consumer electronics, small appliances, and emerging electronics will increase, and driven by product upgrades, the converter and switch socket market is expected to bring steady growth.

  Industry structure: The converter bull is Hengqiang, and the concentration of wall sockets needs to be improved.

The converter bull market accounts for 30-40%. It is expected that the market will be further cleared by the new national standard upgrade. The wall-opening socket CR3 is 31%. Under the trend of demand-side decoration, companies with keen insight and continuous innovation are expected to harvest more.Multiple shares.

  Company advantages: clear positioning, brand and channel advantages.

The positioning of the converter is “safe”, which can reflect the aspects of raw materials, product design, etc .; the brand channel has deep barriers and is close to consumers’ circulation outlets of 730,000;Operation.

Third, LED lighting: differentiated positioning, channels can cooperate with the market size: LED lighting replaces traditional lighting, the market size exceeds 300 billion.

In 2018, the LED general lighting market size reached 3061 trillion, and the CAGR reached 41 in 2010-2018.


  Industry pattern: The layout is scattered under the influence of decorative attributes.

Companies with strong demand 返回码: 500 网站打不开?重查 insights, product innovation, and design and installation service capabilities are trying to grab market share.

  Company advantages: differentiated positioning of “love eyes”, channels can be highly coordinated with the main business of socket switches.

Fourth, digital accessories: better quality, in line with the upgrade market size: the scale exceeds 100 billion, the bull currently covers about 20 billion.

  Industry structure: There are many participants under low barriers, and the market structure is quite scattered.

  Company advantages: Focus on experience, better quality, expected expansion and improvement under consumption upgrade.

Fifth, the comparison of bull competition and management from the comparison of bulls, ops, and nVC: bulls have strong innovation power, deep channel barriers, and brand awareness of new categories in the future.

  Financial comparison: Bulls grow rapidly, high profitability and high turnover achieve high ROE.

  Comparison of development: The bull has a clear development path, and new business and new markets help sustainable high growth.

VI. Profit forecast and forecast The company’s net profit for 2019-2021 is 23/27/32 billion, and the current PE is expected to be 19X in 2020.

  With reference to Op Lighting, Supor, Jiuyang, and Chint Electrical Equivalent, we believe that the Bulls reasonable estimate range is 22-30X, covering for the first time, giving a buy rating.

  Risk prompts risks of fluctuations in demand, increased competition risks, consumption upgrades are lower than expected risks, overseas expansion risks

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