Haolaike (603898): Strong and strong together with Qi Yi Technology to diversify channels

Haolaike (603898): Strong and strong together with Qi Yi Technology to diversify channels

Company statusThe company announced that it intends to short-term “strategic cooperation framework and cross-share investment agreement” with Qiyi Technology (Cayman) Co., Ltd.It was also agreed that: 1) the establishment of a 深圳桑拿网 joint venture company in China.

The joint venture company purchases customized home products from Hollyker, operates independently through a newly established brand, and sells through the channel network of the decoration company cooperated by Qiyi Technology. Hollyker / Qiyi Technology holds 49% / 51% equity of the joint venture company, respectively; 2) The two parties conduct comprehensive cooperation in the field of custom home furnishings, including but not limited to: online drainage, joint promotion, and supply chain channel distribution.

Comment 1. Cooperate with Internet home improvement leaders to further expand channel diversification.

Since 2018, the custom home furnishing industry has faced the diversion of the entire assembly, shopping mall, hardcover and other channels. In the future, home furnishing companies’ barriers and resources in multi-channel and multi-dimensional customer acquisition will become their core competitiveness for development and growth.

We believe that the cross-shareholding and business cooperation between Hollyk and Qiyi Technology will help the company to open up new online channels such as online customers and home improvement, increase consumer substitution, and lay the foundation for future market expansion and promotion.

2. The large home category continued to develop, intensifying new efforts and enhancing product power.

The company launched cabinet products in 2018, and we expect that the company will launch new categories such as doors and windows in 2019, and the one-stop large home product line is gradually improved.

The company released new products in the first quarter of 2019. We expect that the company will continue to increase new efforts and strengthen the competitiveness of differentiated products such as original boards.

In terms of production capacity, the company successively invested in the construction of Luogang, Huizhou, and Conghua three production bases around the Guangzhou headquarters, while building industry 4 in Hanchuan, Hubei.

0 manufacturing base, we expect the company’s logistics costs and labor costs to be further reduced in the future, improving delivery capacity and operating efficiency.

3. Accurate marketing taps consumer demand in market segments.

In 2018, the company set up a special team to sink to county-level cities to conduct consumer surveys, and conduct differentiated marketing based on different consumer needs to achieve accurate customer acquisition. We are optimistic that the company will gradually tap the potential of market segmentation through precision marketing.

Estimates suggest that we maintain the company’s 2019/20 profit forecast1.

57/1.

83 yuan / 杭州桑拿 share remains unchanged, corresponding to P / E 14 / 12X. The company’s valuation has a significant advantage in custom home furnishings. It maintains the recommended level. For the improvement of market risk appetite and estimated repair, the target price is raised by 8% to 26 yuan.14 times price-earnings ratio in 2020, an increase of 22% over the same period last year.

The expansion of risky real estate continued to escalate, industry competition intensified, and raw material prices fluctuated significantly.