GONGNIU(603195) 华创证券·2024-04-28 00:01Investment Rating - The report gives a "Strong Buy" rating for the company, with a target price of 136.2 CNY [1][9]. Core Insights - The company is recognized as the absolute leader in the consumer electrical market, achieving over 80% market share in converters and maintaining a strong net profit margin of 22-25% [1][15]. - The company's unique channel management strategy and lean digital upgrade strategy are key to its strong performance and growth potential in new business areas [1][6]. - The report forecasts a stable growth trajectory for the company's core business, with projected net profits of 45 billion CNY, 52 billion CNY, and 58 billion CNY for 2024-2026, respectively [1][9]. Summary by Sections Company Overview - The company has nearly 40 years of experience in the consumer electrical sector, establishing a strong market position in converters and wall switches, which serve as its cash cow business [16][24]. - It has successfully expanded into LED lighting, digital accessories, and new energy sectors, leveraging its channel management and brand recognition [16][24]. Core Competitiveness - The company employs an efficient and reusable channel model that significantly lowers the entry barriers for distributors, enhancing market coverage [1][6]. - The supply chain has undergone digital upgrades, improving efficiency and reducing costs, with a focus on flexible production [1][6]. - The BBS (Business Basic System) management strategy is highlighted as a critical factor in maintaining operational efficiency and synergy across the organization [1][6]. Main Business and Growth Potential - The converter business is in a mature phase, with a projected market demand CAGR of 2.7% over the next nine years, while the wall switch business is expected to grow through market share gains [1][8]. - The LED lighting market remains fragmented, providing opportunities for the company to leverage its existing channels for growth [1][8]. - New business areas, including the no-main-light category and new energy charging products, are expected to drive significant growth over the next decade [1][8]. Financial Projections - The company is projected to achieve revenue of 15.7 billion CNY in 2023, with a year-on-year growth of 11.5%, and net profit of 3.87 billion CNY, reflecting a 21.4% increase [2][21]. - The report anticipates a stable cash flow and strong profitability, with a projected PE ratio of 27 for 2024 [2][9].