Seagull Living (002084): The front runner in the air conditioning of the sanitary industry
Invest in a logic-listed company that integrates large-scale 上海夜网论坛 production of complete bathrooms.
The company is one of the largest domestic high-end faucet and sanitary hardware product manufacturing service providers. Since 2015, the company has laid out complete sanitary wares, and has three major production bases in Suzhou, Qingdao and Zhuhai.
With the promotion of policies, the whole bathroom industry has started an explosive development period.
1) In February this year, the Ministry of Housing and Construction announced the “Specifications for Residential Projects (Draft for Solicitation of Comments)”, which requires that new residential houses in cities and towns should be fully furnished and delivered, and “waterproofing of bathrooms should be no less than 20 years”.
In addition, the “Technical Standards for the Application of Prefabricated Integrated Bathrooms” has been officially implemented on May 1 this year.
We estimate that the new policy will quickly generate a billion-dollar residential commercial housing complete bathroom market.
2) Relevant policies such as long-term rental apartments and talent programs have been gradually implemented since 2015, which have also indirectly promoted the selection of cost-effective packaged sanitary products for apartment projects.
Unique tools to solve the pain points of the whole bathroom, high-end, low-end products “matched.”
The company acquired Suzhou Youchao, which has rich experience in the production of packaged sanitary wares, and reached technical agreements with Panasonic and Siemens successively. With the company’s absolute strength in the sanitary hardware industry for many years, it has reached world-class production technology.
The surface mount technology and flexible mold technology developed by the company ensure the production capacity of customized products for different needs.
There are two-wheel drive of Chaos and Furunda, which realize the full category coverage of short-term talent apartments, convenient hotel projects, mid-to-long-term refined decoration commercial housing, and luxury residential projects.
Sufficient orders and the gradual release of capacity have entered the harvest period.
The company has successfully entered the integrated sanitary ware collection system of developers such as Vanke and Longhu, and is the only supplier that has obtained both Vanke SMC and color steel plate integrated sanitary ware collection qualifications.
In the fourth quarter of 2018, there were two self-made sanitary ware business segments, Chaos and Furunda, which achieved profit for the first time. In 2018, the operating income reached 68 million yuan, accounting for 3% of the company’s operating income.
With the continued advancement of fund-raising projects, it is expected that the company’s capacity increase will be further released quickly.
At present, the company’s major customers have sufficient orders. The three major production bases are almost full. The production capacity is about 4,500 units / month. If the new plant is completed and put into production, it is expected to reach 9,000 units / month by the end of this year and 18,000 units / month by the end of next year.
Estimates and investment recommendations The complete bathroom industry is about to usher in explosive growth, and the company has the largest complete layout in terms of technology, channels and customers.
We predict that the company’s EPS will be zero after 2019-2021.
35 yuan (three-year CAGR is 62.
2%), giving the company 5 in the next 6-12 months.
The target price of 94 yuan, equivalent to 25 times PE in 2019, is given a “Buy” rating for the first time.
Risks The implementation of the new policy did not meet the expected risks, risks in the real estate industry, risks in the smooth progress of the fundraising project, risks in the price of raw materials, exchange rate risks, risks in the development of new businesses not meeting expectations, and macroeconomic value risks.