Baby-friendly room (603214): The mother-to-baby market has a huge space for consumption upgrade.

Baby-friendly room (603214): The mother-to-baby market has a huge space for consumption upgrade.

Key points of investment: The company deeply cultivates the mid-to-high-end mother and baby market, and is a high-quality leader in the East China mother and baby chain.

1) Company revenue in 2017 18.

100 million, net profit attributable to mother 0.

9.4 billion.

The compound growth rate of operating income in 2014-2017 is 14.

1%, attributable to the mother’s 厦门夜网 net profit compound growth of 28.


Revenue for the first three quarters of 2018 was 15.

2.1 billion, an increase of 17 in ten years.

7%, single-quarter growth accelerated quarter by quarter.

2) As of the third quarter of 2018, the company has a total of 212 directly operated stores.

Total area is 12.

70,000 square meters, concentrated in Shanghai, Jiangsu, Fujian, and Zhejiang, maintaining about 1 nationwide.

5 million / sqm high efficiency; 3) The actual controller is the founding team, and the mother and baby industry has decades of experience.

The controlling shareholders Shi Qiong, Mo Ruiqiang, Dong Qincun, and Qi Jiwei have taken root in the mother-infant chain retail industry for many years, holding a total of 40 shares.

26%, equity is stable, and executives have deep industry experience.

Accelerating the exhibition in advantageous areas, developing independent brands, and the gross profit margin steadily increased.

1) Taking root in East China exhibition stores is accelerating, with mall stores accounting for over 70%, online assistance, and excellent channel structure.

The company’s store sales accounted for nearly 90%. Another SPA, touch and other store additional services to efficiently drain, online APP assisted physical stores to achieve closed-loop sales and improve experience.

After steadily going offline, it entered the acceleration period of opening stores. In the coming year, it will strive to maintain 40+ net openings, and its online revenue will be 27.25 million yuan, which has nearly doubled.

2) Benefiting from the increase in the proportion of independent brands and the scale effect of the supply chain, the profitability promotes continuous improvement.

High gross profit cotton category maintains 40% + gross profit level, self-owned brands account for over 50%, sustainable development in the future, high brand loyalty milk powder category gross margin has steadily increased to nearly 20%, high turnover rate brings stable customer flow and profitsupport.

The company has three major logistics centers and warehouses, with an area of nearly 40,000 square meters, and efficient distribution has benefited from the increase in scale.

The extension helps to expand in different places, and the integration of the industrial chain builds barriers. East China’s leader successfully strives for replication.

1) The Chongqing team went southwest with investment and merger.

The company invested 18 million to acquire Chongqing Taicheng 51.

With 72% equity, we will integrate the 20 merged pregnant and infant chain stores owned by Taicheng, and cooperate with the baby-friendly room supply chain to enter the southwest; 2) Share in upstream high-quality suppliers and integrate the industrial chain to build barriers.

The company subscribed to Wyeth agent Funuo Health 4 for 20 million.

6% equity, to further stabilize the supply chain and strengthen upstream control.

The mother and infant industry has shown a clear trend of consumption upgrades, and the growth policy is encouraged to continue to increase. The industry is committed to maintaining high-speed development momentum.

1) The “421” family structure drives up maternal and infant consumption, benefiting from high-end and high-quality consumption.

In today’s world, the family structure of “4 elderly people + 2 parents + 1 child” pays more attention to the quality of consumption. In 2017, maternal and infant consumption accounted for 18% of the consumption of young families.

2% and is expected to continue to improve.

2) The fertility policy has continued to relax and encourage fertility has become a trend.

The existing neonatal policy scientifically controls the population trend. When the birth rate is under pressure, the development policy is expected to continue to relax and encourage promotion. In addition, the “third baby boom” newborns have entered the booming age group of 20-29 years old.The number of newborns can be expected in recent years.

3) The scale of the mother-to-child industry is over 2 trillion, with 76% of the offline barriers being high. The mother-to-child chain accounts for more than half of the offline.

Due to its professionalism, scientific childcare services, and learning needs, the offline professional chain naturally has high customer stickiness.

The company is the only high-quality mother-to-child chain target. East China’s leading steadily and experienced mother-to-child chains have rich experience. Endogenous + extension promotes accelerated store expansion, benefits from consumption upgrades + policy bonuses, full potential, first coverage, and gives an overweight rating.The company announced on February 26, 19, that it plans to grant 55 to middle and high-level equity incentives, and the three-year performance target CAGR of 20% in 19 years shows development confidence.

It is expected that while the company’s same store maintains a mid-digit growth, the exhibition store accelerates and the growth is highly certain.

Expected net profit attributable to mothers from 2018 to 20201.



810,000 yuan, corresponding to 36/29/23 times the PE, for the first time coverage, giving an overweight rating.

Risk warning: growth rate continues to decline, and off-site exhibition shops are not smooth

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