Dongyi Risheng (002713): Sumei exceeded expectations and reduced direct sales steadily expanded to improve quality

Dongyi Risheng (002713): Sumei exceeded expectations and reduced direct sales steadily expanded to improve quality

The event Dongyi Risheng released the 2018 annual report: the company achieved operating income in 201842.

30,000 yuan, an increase of 16 in ten years.

36%; net profit attributable to mothers2.

53 ppm, an increase of 16 in ten years.

12%; net profit after deduction to mother 2.

14 ppm, a five-year increase of 5.

77% EPS 0.

97 yuan.

Due to restrictions in the home improvement industry, expenses increased in the first quarter, and the company achieved operating income in Q1 20197.

97 ppm, an increase of 11 years.

9%; net profit attributable to mothers was 79.7 million yuan, a year-on-year decrease of 28.


Scoring quarterly view: The company’s fourth quarter performance improved 2018Q1-Q4 The company achieved operating income7.

200 million, 10.

900 million, 11.

300 million, 12.

600 million, an increase of 34 each year.

4%, 14.

3%, 27.

0% and 2.

5%; net profit attributable to mothers moves -5.

7%, +43.

1%, +46.

96% and -4.


The performance in the fourth quarter was improved compared to the second and third quarters.

In terms of different industries: the main business of home improvement and public decoration has grown steadily, and the precision growth of the fine fitting business has reported a rapid growth rate. The company’s four businesses of home improvement / public fitting / fine fitting / concession income have achieved operating income respectively.

7 ppm / 3.

6 ppm / 7977.

60,000 yuan / 667.

30,000 yuan, respectively, short-term changes of + 13% / + 22% / + 533% / -14%, of which: the home improvement and public service business has developed steadily, and the precision tooling business has achieved rapid growth, contributing to the increase in revenue.

Comprehensive gross profit margin 37.

16%, an increase of 0 from the previous year.

A total of 25 single statements, the company’s engineering business and design 南京桑拿网 business respectively achieved a gross profit margin of 32.

55% and 67.

73%, respectively -0.

04 and -0.

50 units.The home improvement / hardcover / public service business achieved gross profit margins of 35 respectively.

83% / 59.

98% / 37.


Gross profit margin remained stable overall.

In the report that the increase in the rate during the period resulted in a decrease in the net worth budget, the company achieved a net interest rate.

32%, a decrease of 0 from the previous year.

The 23 single ones are mainly due to the increase in the expense ratio during the period.

Selling expense ratio, management expense ratio and financial expense ratio are 16 respectively.

87%, 11.

06% and 0.

16%, a change of +0 over the same period last year.

75, -0.

27 and +0.

14 units.

Report the budget, and financial expenses increase by 992 per year.

04%, mainly due to unrecognized financing costs and exchange rate changes.

Expansion of direct-operated stores + introduction of strategic investors + rich e-commerce platform, continuous improvement of online and offline customer acquisition capabilities. Expansion of direct-operated stores: As of the end of December 2018, the company opened a total of 13 direct-operated A6 business stores and added 13 to 163, SUMEI has 48 direct-operated stores.

With the company’s strategic transformation, at the end of 2018, the company completely stopped the service provider model. The original franchisees will gradually terminate the contract, and the company will all adopt the direct sales model in the future.

This strategic transformation can ensure the company’s brand quality and the steady expansion of the company’s size.

Dating strategic investors: In the first half of 2018, the company dated Vanke (holding 3.

12%) and Chain Home (holding 1.

60%) As a strategic investor, tap the advantages of resources to expand the company’s marketing network coverage; enrich the e-commerce platform: the company integrates the cooperation framework with the four major search engines, and reaches strategic cooperation with Tmall, Taobao, Jingdong and other platforms, and at the same time the PC official website, H5’s official website was remodeled to complete the development of the micro official website, official app, micro mall, and small programs, and continuously expanded the online undertaking capacity.

Newly signed contracts grow by 5 per year.

1%, home improvement business orders continued growth report Merger company gradually won the new long-term single amount42.

62 ppm, a five-year increase of 5.


Among them, the home improvement business and the public installation business were newly signed 37.

7 billion and 3.

80 ppm, an increase of 4 each year.

5% and decrease by 14.

6%, home improvement business orders grew faster, and public order orders in the new year reduced the amount of orders.

As of the end of December 2018, the company’s cumulative total of contracted and uncompleted orders has reached 35.

USD 9.3 billion, of which home improvement business and public service business have 29 orders in hand.

93 ‰ / 4.

US $ 5.8 billion, with ample reserve of main business orders, driving the company’s revenue and profits to achieve rapid growth.

The industry leader has grown steadily. As one of the leaders in the home improvement industry, the company has an “overweight” rating and has an advantage in brand building and management capabilities.

Considering that in addition to the steady development of the traditional A6 business in recent years, the company has continuously strengthened the development of various new businesses such as Sumei Super Home, Ruizhu, Hardcover, and Jiai Design, and has created multiple business models, resulting in continued growth in new breakthrough orders.Yingying stores expanded steadily, non-provincial business continued to increase, and many other factors. We estimate the company’s net profit attributable to mothers to be 3 in 2019-2020.

24 and 3.

91 trillion, EPS is 1.23 and 1.

49 yuan, raise the target price to 20.

8 yuan, corresponding to PE is 16.


Maintain the “overweight” rating.

Risk reminders: the risk of a decline in the macroeconomic climate; the real estate industry’s policy risks; the target performance of mergers and acquisitions is not up to the expected risk; the risk of excessive increases in the prices of agricultural products and raw materials.