Diou Home Furnishing (002798) In-depth report: B-side faucet runs by the wind

Diou Home Furnishing (002798) In-depth report: B-side faucet runs by the wind

Highlights of the report Tile industry: Good category in building materials. The excellent track performance of the ceramic industry is mainly derived from: 1. The market size of the ceramic tile industry is large, about US $ 500 重庆耍耍网 billion, and because the existing brand echelon is solidified in the minds of consumers, new entrantsIt is difficult to become a first-line brand.

2. In the production cost of ceramic tiles, energy and labor account for a large proportion, and due to the overlapping of tile SKUs, the yield rate will decrease during the conversion process, and the unit cost will increase.

Therefore, the ceramic tile production end has a scale advantage and is the most suitable building material category for the B-end business.

3. Building ceramics are high energy-consuming and highly polluting industries, and the emission standards are constantly increasing. Small enterprises are subject to environmental constraints to accelerate their withdrawal.

Oushenuo: The engineering side has the first-mover advantage, and the size helps cornering overtaking. Oushenuo is the B-side leader in the ceramic tile industry with a market share of more than 25%. It has the advantages of brand, supply chain layout, systematic management, and risk control.

With the rapid increase in the proportion of domestic hardcover houses in recent years, it is expected that the company will be able to take advantage of the first-end advantage of B-side to achieve rapid growth, and the income of engineering side is 10-15 billion yuan.

Oceano: The retail side provides space for channel sinks and the rapid growth of dealers. We believe that the advantages of Oceano C-C are mainly reflected in: 1) A complete supply chain system is established through the big B business, which is beneficial to the small B business of the dealer.Development, 2) more simplified sales channels.

From the objective environment: 1) the development of the retail end towards small B, 2) the transformation of certain segmented retail businesses, the company used its own advantages to achieve nearly double the growth of dealers in 2018.

We believe that through the company’s coverage of blank outlets, the retail business is gradually maturing, and expanding the flow of consumers and designers from the Eurotherm cloud merchant platform will help form the long-term logic of the company’s growth.

At present, Diou: Xiao Yuhong, but there is a better track to trace back the development of Dongfang Yuhong. In 2012, it successfully seized the potential of real estate developers to collect and start a new round of high-speed growth.

Similarly, O’Connor is expected to take advantage of its B-side advantages, overcome the possibility of a rapid increase in the proportion of hardcover houses, expand its entry into the developer’s collection catalog, and enjoy industry dividends.

In addition, the ceramic tile industry track is better than the waterproof industry: 1) scale advantage, B-side gross margin is higher than C-side, 2) the retail market is large, C-side provides long-term growth and excellent cash flow, and 3) front-line brands have brandsBarriers can use the surplus production capacity of the industry to achieve asset-light operations through OEM production. The European Union ‘s ROE in 2016/2017 exceeded 25%.

It is expected that the company’s attributable net profit for 2019-2021 will be 5.



USD 800 million, and because the tiles are mainly used for hardcover replacement, it can lock B-side growth one year in advance according to the bidding rate of the model room. The growth is more certain. The retail business of tiles and the sanitary ware business also provide the company with stable cash flow.

Corresponding to the PE of 2019 only 18 times, maintaining the buying level.

Risk Warning: 1.

New customer development was less than expected; 2.

Deteriorating cash flow.