Op Lighting (603515): Q2 revenue chain attachments play a synergy with home business license merger management

This report reads: Q2 revenue growth rate is slightly scheduled, the overall revenue growth in the second half is expected to be better than the first half.

Home furnishing license merger management eliminates channel conflicts and synergies to enhance comprehensive competitiveness and increase holdings.

Investment points: Maintain profit forecast, maintain target price and increase holdings.

Q2’s revenue growth rate is expected from the previous quarter. It is expected that overseas business will recover in the second half of the year. Household / e-commerce / business licenses will continue the trend of the first half. The overall revenue growth in the second half will be better than the first half.

Maintain 2019-2021 EPS forecast1.

40/1.

61/1.

87 yuan, maintaining the target price of 41.

5 yuan, corresponding to 30xPE in 2019, “overweight”.

Q2 revenue performance was basically in line with expectations.

2019H income 37.

7.8 billion (+7.

1%), net profit attributable to mother 4.

0.5 billion (+13.

09%), deduct non-attributed mother 2.

5.7 billion (+1.

79%), gross profit margin 36.

08% (-1.

37pct), net interest rate 10.

72% (+0.

57pct).

Q2 single quarter income 21.

15 billion (+3.

42%), net profit attributable to mother 3.

1.9 billion (+10.

81%).

1.7 billion (+0.

46%), gross profit margin is 35.

93% (-1.

27pct) and a net interest rate of 15.

08% (+1.

01pct).

Q2’s revenue growth rate was QoQ.

In Q2, the retail channel increased by a few digits; the distribution channel increased by double digits; the e-commerce increased by double digits, and the chain grew at a high base; the commercial license maintained double-exponential growth, and overseas revenue from some regions’ product re-certification declined slightly.

Q2 gross profit margin decreased with 1.

27pct, mainly due to home channel promotion and product structure adjustment.

Receivables from overseas and e-commerce channels accelerated, and bills receivables and accounts at the end of the first half of the year declined9.

44%. Merchant management of home furnishings eliminates channel conflicts and synergies to enhance comprehensive competitiveness.

The overseas business is expected to recover in the second half of the year, and the household / e-commerce / business license will continue the trend in the first half. The overall revenue growth in the second half will be better than the first half.
The combined management of home business licenses will help improve the professional service capabilities of home channel customers in connection with terminal B and enhance their overall competitiveness.

The company is a domestic general lighting leader. It has first-mover advantages in channels, products and brands, and has a large space for future 杭州桑拿 integration.

Core risks: E-commerce price war restarts, and the integration of the home lighting business division is less than expected.