Gu Jia Household (603816): Performance Trends Increase to Better Executives and Boost Market Confidence

Gu Jia Household (603816): Performance Trends Increase to Better Executives and Boost Market Confidence
Key points of the report Description 1. Based on confidence in the company’s future development prospects and recognition of the company’s investment value, the company’s director and senior executive Mr. Li Donglai participated in the limited partnerships, trust plans and asset management plans, etc.Self-raised funds, within 12 months from the date of this announcement, at a price of not more than RMB 55 per share, the company will increase its shareholding by not more than RMB 100 million and not more than 200 million. 2. In November 2019, the company has cumulatively repurchased 184 shares through centralized bidding transactions.930,000 shares, accounting for 0% of the company’s total share capital.31%.As of November 30, 2019, the company has cumulatively repurchased 398 shares.320,000 shares, accounting for 0% of the company’s total share capital.66%, the total transaction amount is 1.4.4 billion yuan (excluding transaction costs). Incident review The company’s controlling shareholders and executives have repeatedly increased their holdings, and the company’s proposed repurchase uses all equity incentives, demonstrating confidence in the development prospects.Based on the price of 55 yuan / share and the lower limit of 1 trillion, the minimum number of shares held by Mr. Li Donglai this time is 1.82 million shares (0% of the current total share capital).30%). Since September 2018, the company’s controlling shareholders and their concerted parties, and multiple executives have repeatedly increased the company’s stock, reflecting the management team’s confidence in the company’s development prospects. Domestic sales through product iterations and increased marketing efforts, combined completion and recovery will lead to a rebound in home prosperity, and the performance will gradually move forward; export sales will gradually build a bottom, and the medium and long-term overseas production capacity is expected to usher in new development opportunities.The company’s strong marketing and strong product competitiveness (re-titled Cat Night again in 2019,武汉夜生活网 double eleven launched a variety of new products, etc.), to achieve better orders (omnichannel retail order size on the day of double eleven reached 7).5.1 billion).In addition, the growth rate of completion since August has continued to turn positive, or it may lead to a rebound in home prosperity, further pushing the company’s domestic sales performance upward. Continue to be optimistic about the company’s product expansion and channel upgrades, and move forward to become a major home brand leader, maintaining the “Buy” rating.The company intensified its marketing efforts, continued to launch new product series, and completed the completion recovery logic. It is expected that the domestic sales growth rate in the fourth quarter is still expected to achieve better growth. The overall export sales are under control, and the extensions are stable. Do not worry too much about the issue of goodwill impairment.Looking forward to next year, through the company’s channels to gradually transition to the ground, and completion or driving home prosperity, the company’s domestic sales are expected to continue to rise, and export sales are expected to improve margins with the new production capacity put into production and this year’s low base; medium and long-term stability is optimistic that the company is based on softwareLeader, a big growth space brought by moving towards the leader of the big home retail brand.We expect the company’s EPS to be 1 in 2019-2021.96/2.32/2.65 yuan, corresponding to PE20 / 17 / 15X, maintain “Buy” rating. Risk Warning: 1. The growth rate of real estate is lower than expected; the Sino-US trade environment has deteriorated; the prices of raw materials have changed significantly; 2. The company’s channel progress was less than expected.