GreatStar(002444) 光大证券·2024-12-01 08:01Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for future performance [7][98]. Core Insights - The company has established a strong position in the global tools market through a dual strategy of acquiring leading international brands and developing its own brands, with its own brand (OBM) revenue share increasing from less than 10% in 2016 to nearly 50% in 2023 [1][21]. - The company benefits from a robust global supply chain and sales channels, with significant revenue derived from the U.S. and European markets, which are expected to see a recovery in demand due to inventory replenishment cycles [3][4][70]. - The company is projected to achieve net profits of 20.8 billion, 24.5 billion, and 27.7 billion yuan for the years 2024 to 2026, with corresponding EPS of 1.73, 2.03, and 2.30 yuan, reflecting a favorable valuation compared to peers [3][93][94]. Summary by Sections 1. Rapid Development of Own Brands and Steady Profitability Improvement - The company focuses on its core tool product business, with OBM revenue showing consistent growth, achieving 38.37 billion, 50.88 billion, and 52.15 billion yuan in the last three years, with year-on-year growth rates of 46.10%, 32.57%, and 2.50% respectively [19][24]. - The company has a concentrated ownership structure, with the largest shareholder holding 38.56% of the shares, ensuring stability and professional management [27]. - The company has effectively controlled operating expenses, leading to steady improvements in profitability [29]. 2. Multi-Billion Dollar Tool Market with Recovering Downstream Demand - The global tools market has shown steady growth, with the market size increasing from 77.8 billion USD in 2017 to 99.8 billion USD in 2021, with a CAGR of 6.4% [42]. - The power tools segment is expected to grow at a higher CAGR of 6.2% from 2022 to 2026, driven by technological advancements and increasing demand in developed markets [43][45]. 3. Emphasis on Innovation and Global Layout to Enhance Competitiveness - The company has established five R&D centers globally, recognized as a national intellectual property demonstration enterprise, enhancing its innovation capabilities [2][74]. - The company has a comprehensive global supply chain and sales channels, with 23 manufacturing bases worldwide, enabling efficient global procurement and distribution [2][79]. 4. Profit Forecast - The company is expected to achieve revenues of 137.68 billion, 165.90 billion, and 189.15 billion yuan from 2024 to 2026, with corresponding net profits of 20.8 billion, 24.5 billion, and 27.7 billion yuan [93][94]. - The company’s gross margin is projected to stabilize around 30% in the coming years, reflecting improved operational efficiency and product mix [88][90]. 5. Valuation Levels and Investment Rating - The company’s current stock price corresponds to a PE ratio of 16, 13, and 12 for the years 2024 to 2026, which is lower than the average PE of comparable companies [94][96]. - The report highlights the company’s strong market position and growth potential, justifying the "Buy" rating [98].