China Galaxy Securities released a research report stating that the “recommended” rating for Shouyu Mingchuang Premium (09896) is based on the judgment of its store expansion expectations and single-store operations, and predicts that 2024/2025/2026FY will achieve revenue of 147.63/181.21/21,691 billion yuan and net profit of 24.52/30.2/3.614 billion yuan, respectively.
The report's main points are as follows:
The company is a global creative lifestyle home retailer and is in a stage of rapid development.
The company incubates two major brand businesses: Mingchuang Premium and TOPTOY. In 2013-2018, as a comprehensive retailer with its own brand, Mingchuang Premium continued to innovate household goods with “IP” characteristics, quickly exhibited stores nationwide, and implemented a global strategy to begin overseas layout in 2015; in 2018-2021, the company expanded its main business, added TOPTOY's trendy collection store as the company's second growth curve, and was listed on the NYSE and Hong Kong Stock Exchange, further expanding its business scale; at this stage, Mingchuang Premium's revenue has exceeded 10 billion dollars, and the company continues to seek innovation and further breakthroughs in channel products and channels. The future growth prospects are worth looking forward to.
Product side: Cost-effective products are quickly released, directly hitting consumer pain points.
(1) Production side: Products have the two major advantages of rich variety and high cost performance. In terms of variety, the company adheres to the “711” new concept, and currently launches an average of about 530 SKUs every month, and product iterations attract more consumers; in terms of price, SPA's business model has shortened the length of the supply chain, and the integration of design, manufacturing and sales has further reduced costs. Low-cost products meet rational consumption needs, and gross margin continues to rise, driving continuous improvement in profit levels. (2) Marketing side: Be optimistic about the trend of “interest consumption”, respond to consumer preferences, implement an “IP empowerment” strategy, dig deeper into the potential for joint innovation between brands and IPs, and anchor “own IP” to increase customer stickiness.
Channel side: Promote omni-channel layout at home and abroad, and penetrate the cryptographic consumer market.
(1) Offline: The expansion of domestic first-tier and second-tier cities will further accelerate the expansion of urban penetration, and is expected to further accelerate the expansion of urban penetration rates in the future; overseas markets are mainly expanding in Asia and America, and the store layout is more high-end, and TOPTOY's overseas layout plans are also steadily being planned; in addition, efforts are being made to improve single-point efficiency at home and abroad, and land in “super stores” to maximize store value. (2) Online: Strengthen the coverage of all online platforms at home and abroad and the simultaneous transformation of offline customer flows, and promote a new retail model of online and offline collaboration.
Risk warning: the risk that net stores will not be as fast as expected, the risk that overseas operation results will fall short of expectations, the risk of insufficient domestic consumer confidence, and the risk that the company's products and marketing results fall short of expectations.