GreatStar(002444) 广发证券·2024-09-24 02:11Investment Rating - The report gives the company a "Buy" rating with a target price of 34.6 yuan per share, based on a 18x PE multiple for 2024 [1][2] Core Views - The company is a successful example of traditional Chinese manufacturing transitioning to overseas markets, evolving from an OEM to an OBM model with OBM revenue accounting for nearly 50% in 2023 [1] - The company has developed four key expansion tools: channel capabilities, R&D and supply chain management, M&A integration, and global layout [1] - The company is expected to benefit from the Federal Reserve's interest rate cuts, which will stimulate the US housing market and inventory replenishment cycles [1] - The company's net profit is forecasted to grow by 36.6%, 21.9%, and 25.2% from 2024 to 2026, reaching 2.3, 2.8, and 3.5 billion yuan respectively [1] Industry Overview - The global tool market is driven by home renovation investments in Europe and the US, with a stable long-term growth rate of 3-5% CAGR [16][17] - The DIY culture in Europe and the US, driven by high labor costs and historical factors, accounts for over 60% of hand tool demand [17][18] - The industry is characterized by low barriers in manufacturing but high barriers in branding and channels, with OBM and channel players capturing the highest value [20][21] Company Development - The company has transitioned from an OEM to an ODM and then to an OBM model, with significant M&A activities driving its OBM revenue to nearly 50% [12][28] - The company has established a global production layout with 55% of its production capacity located overseas, mitigating risks from US-China trade tensions [53][68] - The company's core competitiveness lies in its channel capabilities, R&D and supply chain management, M&A integration, and global layout [62][63] Financial Performance - The company's revenue and net profit have shown strong growth, with a CAGR of 14.5% and 15.2% respectively from 2010 to 2023 [14] - The company's net profit is expected to grow significantly from 2024 to 2026, driven by the Federal Reserve's interest rate cuts and inventory replenishment cycles [1][5] - The company's ROE has been steadily increasing, reaching 15.3% in 2023, indicating strong profitability [5] Future Outlook - The company is expected to benefit from the Federal Reserve's interest rate cuts, which will stimulate the US housing market and inventory replenishment cycles [1] - The company's OBM revenue is expected to continue growing, driven by further M&A activities and the expansion of product categories such as power tools [1][57] - The company's global production layout will be further strengthened, with new production bases in Southeast Asia expected to be operational by 2025 [69][70]