Baby-friendly room (603214): Proposed to acquire the exclusive distributor of Japanese Royal Toys in China to extend the company’s industrial chain layout

Baby-friendly room (603214): Proposed to acquire the exclusive distributor of Japanese Royal Toys in China to extend the company’s industrial chain layout

Event: On December 28, the company issued an announcement saying that it is expected to acquire 58% of the target company’s 100% equity held by Shanghai Zhiyile Trading Co., Ltd., including all assets, business, personnel and authorized ownership of the Japanese royal toyThe exclusive right to use and sell exclusive intellectual property rights of Japanese royal toys in mainland China. The subject company can independently manage products containing intellectual property rights of the Japanese royal toy brand in mainland China. Through commission processing and development of distributors, it has full control.Production and sale of royal toys in mainland China.

  Extend the company’s industrial chain layout and give play to industry synergy.

Royal Toys (TOYROYAL) is a Japanese century-old baby toy brand. It is a professional infant brand company that integrates infant toys, supplies and textiles. The three major brands TOYROYAL, BABYROYAL, KIDROYAL, are infant toys,Maternal and infant supplies, baby bedding, and royal toys are the best toy brands in the 0-3 age group in the Chinese market.

The company’s acquisition performance: (1) the company expanded the wide toy retail market, strengthened the advantages of toy categories, extended the company’s industrial chain layout, and exerted industrial synergy; (2) increased gross profit margin, enhanced the company’s sustainable development capabilities, and enhanced the company’s marketCompetition and profitability.

  As the first share of maternal and infant retail, the company accelerated store layout, and its gross profit margin continued to hit record highs.

(1) Acceleration of store openings: In 2019, H1 will open 10 net stores, Q3 will open 15 net stores in a single season, and it is estimated that Q4 will open 20 stores (currently, 30 stores have been contracted to be opened). In the future, it will focus on Chongqing in the southwest region and acquireChongqing stores are expected to turn a profit in Q4, and it is expected that the store opening speed will increase to 80 in 2020.

(2) The gross profit margin has increased for four consecutive years: the company’s product structure has been adjusted, and the proportion of its own products has increased. Through optimization of the supply chain, the company’s comprehensive gross profit margin will be further improved.

(3) Increase investment in e-commerce platforms: In 2019, the company will formally cooperate with Tencent. In the future, 佛山桑拿网 it will cooperate on WeChat mini-programs and advertising to bring more traffic to the company.

  Profit forecast and rating.

It is estimated that the company’s net profit attributable to the parent in 2019-2021 will be 1.

6 trillion, 2 trillion, 2.

500 million, EPS is 1.

53 yuan, 1.

96 yuan, 2.

45 yuan, corresponding PE is 27/21/17 times, maintain “Buy” rating.

  Risk warning: The store development speed and store operation efficiency are lower than expected, and the chain retail model has risks such as rental growth.