Cobos (603486) Annual Report Comments: Private Label Maintains Good Growth, Foundry Business Shrinks

Cobos (603486) Annual Report Comments: Private Label Maintains Good Growth, Foundry Business Shrinks
The contraction of foundry business led to the revenue growth rate in the first quarter of 2019. The reorganized company disclosed the 2018 annual report and the 2019 first quarter report, and the company realized operating income in 20185深圳桑拿网 6.900 million (+25 year-on-year.1%), net profit attributable to mother 4.900 million (+29 compared to the same period last year).1%), gross profit margin 37.8% (+ 1% year-on-year.3pct), net interest rate 8.5% (+0 year-on-year.3pct).2018Q4 Revenue 19.400 million (+19 year-on-year.5%), net profit attributable to mother 200 million (YoY + 22).8%), gross profit margin 39.5% (+0 year-on-year.3pct), the net interest rate is 10.2% (+0 year-on-year.3pct).2019Q1 operating income12.500 million (+3 year-on-year.1%), the net profit attributable to the mother is 70.14 million yuan (YoY-23.8%), gross profit margin 36.6% (+ 1% year-on-year.3pct), net interest rate 5.6% (YoY-2.0pct).  The growth rate of revenue in the first quarter of 2019 is preliminary: The company strategically contracted the foundry business, which led to the cleaning of small household appliances business. The revenue of the service robot foundry business declined, but the company’s own brand business developed well and the revenue of its own brand service robot businessUp 248%.  The decrease in net profit attributable to mothers in Q1 2019 is due to: 1) the company increased its expenditure and the sales expense ratio increased by 2 pct; 2) the management expense ratio increased by 1 pct;3 points.  In 2018, the growth rate of overseas independent brand business was beautiful.In 2018, by region, domestic sales revenue was 2.8 billion, with a long-term growth of 21%, and external sales revenue was 2.9 billion, an increase of 29%. Among them, the overseas independent brand business of sweepers grew rapidly. Specifically, the US marketRevenue grows by almost 100% per year, and revenue in other mainstream regions grows by approximately 50% per year.In terms of products, the service robot business revenue was US $ 3.9 billion, an increase of 35% year-on-year; the small home appliance business revenue was US $ 1.7 billion, an expansion growth of 8%, and the service robot business achieved rapid growth.In terms of channels and online channels, the company further deepened its cooperation with mainstream e-commerce and actively expanded new channels. In 2018, offline channel revenue increased by 62%, the number of offline stores increased to 1500, and the average single store sales increased by 29%.  Looking forward to the strategic contraction of the foundry business, the revenue growth will return to a good growth. In the short term, the company’s strategic contraction of the foundry business has led to changes in revenue growth.The proportion of planned product sales further increased to 53%, and the overseas market continued to expand. The company ‘s mainstream offline retail channel stores in the US market further expanded to approximately 4,500. We believe that the strategic contraction will resume good growth.  In the long run, Cobos is a leading company in the domestic service robot industry, ranking first in the cleaning robot industry for many years.Zhongyikang expects that the sweeping robot market will maintain a compound growth rate of 20% from 2017 to 2020. Under the continuous growth of the industry, the leading players will fully enjoy the industry development dividend; coupled with the company’s expansion in overseas markets, the company’s performance is expected to maintain a good futureincrease.  For profit forecast, we assume that: the company ‘s main business of the company ‘s independent brand business is well developed, and the foundry business will resume good growth after the strategic contraction is completed; the consumer upgrade trend will continue, the penetration rate of cleaning robots will continue to increase, and the industry will maintain rapid growthThe company has good long-term growth.Based on this, we estimate that the company’s net profit attributable to its mother for 2019-2021 will be 5.7,6.9, 8.50,000 yuan, an increase of 17 in ten years.5%, 20.5%, 23.6%.The latest closing price corresponds to PE 32 in 2019.25x, refer to overseas sweeper leader irobot 2019 PE 32.27x, considering 杭州桑拿that the company’s expected return to mother’s net profit in 2019 will grow faster than irobot (wind unanimously expects irobot’s return to mother’s net profit to account for 2% in 2019), giving Cobos a PE of 2019, corresponding to a reasonable value of 48.RMB 28 per share.Maintain the “overweight” rating.  Risk Warning: Replaced by vacuum cleaner products, the competition pattern of the sweeping robot market deteriorates; overseas sales are less than expected; overall consumer demand is weak.