Xinbao shares (002705): The export and online sales of the business were mainly affected by the epidemic

The company’s recent situation has been affected by the epidemic situation, and most companies across the country have delayed construction. We track the company’s recent developments.

Comments We expect the impact of the epidemic to be small: 1) The company’s foundry business accounts for more than 85%, including overseas foundry and domestic foundry (such as for Xiaomi, Mingchuang, etc.).

As the start of the plant 南京桑拿网 is expected to be postponed until February 10, the impact will be small.

2) Although the epidemic situation will affect offline retail, the company’s retail business is mainly online, with a low offline share.

For example, the Mofei brand has about 1,000 display platforms in high-end department stores, boutique supermarkets, and tide brand stores, and offline sales account for no more than 20% of the Mofei brand.

Brand expansion and category expansion will be important growth points in the future: 1) The company’s products have expanded from small kitchen appliances to home care appliances, health beauty appliances and other products.

The production capacity of small batch customization allows the company to undertake a wide range of product categories.

2) Brand promotion matrix. In addition to the small kitchen appliance brand Mofei, the company also has a beauty care appliance brand GEVILAN, a tea appliance brand Mingzhan, a water purifier brand Lycra, and a multi-platform brand Kaiqin.

Xinbao ‘s subordinate brand has the longest history in the Middle East. Because Tmall ‘s channel traffic bonus is no longer available, the company ‘s business is undergoing adjustments in 2018 and 2019.

Social e-commerce mainly avoids competition with mainstream brands: 1) Mofei is the first brand of small appliances in social e-commerce channels, multi-function pots, portable juicers (shake cups), portable kettles and other products to avoid the USSupor, Jiuyang’s strong categories, Xiaohongshu, Douyin, live broadcast and other social e-commerce retail methods also avoid direct competition with other small household appliance leaders.

In 2019, we estimate that the sales of the Mofei brand will increase by more than 200%, with a ratio of about 6-7 megabytes, and revenue will account for more than 7%.

2) The traditional sales model is definitely unable to compete with traditional home appliance companies. The company adopts a new model. The team members and traditional home appliance companies are also different, and they have seized the traffic bonus brought by the rise of social e-commerce.

Estimates suggest that we maintain our EPS forecast for 2019/2020 of zero.

85 yuan / 0.

90 yuan, EPS forecast 1 for the date of 2021.

04 yuan.

Maintain neutral rating and target price.

00 yuan, corresponding to 20 times / 19 times 2019/2020 price-earnings ratio, there is 16% downside compared with the current consensus.

The current contradiction corresponds to a 24x / 22x 2019/2020 P / E ratio.

Risk epidemic development exceeded expectations; RMB exchange rate fluctuation risk.