Peach Bread (603866): The High Moat Company in the Growth Track

Peach Bread (603866): The 青岛夜网 High Moat Company in the Growth Track

The short-term insurance industry enjoys a high degree of prosperity, but business is extremely difficult to do, and it depends on turnover rate to win.

As a leader in short-term guarantees, Taoli has the same cultural consistency and excellent channel management capabilities as its core competitive advantage. It is making room for determination through national distribution and channel refinement.

Dali joining the competition is a challenge to Dali and a test of Taoli. The short-term estimates of Taoli’s performance have brought uncertainty or suppression, but it is because of this that it contributes long-term value to buy points.

We give a “strong recommendation-A” rating with a target price of 45 yuan, corresponding to 40X in 19 years and 20X in 23 years.

Short-term insurance: Business with a high degree of prosperity is also extremely difficult to do.

Space: The baking industry currently has 211 billion markets each year, maintaining a high growth rate of more than 10% in the past five years.

In terms of international comparison, the long-term baking per capita consumption of the remaining overseas space can increase the staple food rate of bread, while the short-term bread has a product advantage over Changbao, and an expansion advantage over bakeries, helping to promote its improvement inProportion of baking industry.

Barriers: Short-term insurance is a difficult business. First of all, the harsh warranty period brings high channel turnover requirements, which makes the industry’s natural profitability weak. The second special operation mode brings great difficulties in the training and transformation of dealers, and the expansion it brings.Problems such as slow speeds have made the industry difficult for small brands to survive. Traditional giants are rarely willing to get involved in the segmented industry, but it has also given some protection to existing players.

Tao Li: Enabling management barriers, high moats to cash in the industry’s certainty.

We divided the regional consumption of peaches and plums and predicted that it would not be difficult for peaches and plums to reach 10 billion in the next five years.

Taoli has the first-mover advantage in the industry, excellent management barriers and the formation of Chenghe. The family company’s ingenuity guarantees intensive cultivation, strong cultural consistency and strong channel implementation, and the positive cycle utilization ROE is rapidly strengthened.

Management barriers help companies to more surely fulfill the industry space, long-term growth is rare.

Profit fluctuations: short-term fluctuations and clear long-term paths.

1) There is a certain degree of fluctuation in the release rate between quarters: Taoli, which still has potential in the nationalized space and sinking channels, due to local expansion is less than expected, the release rate of quarterly profits has a certain degree of fluctuation.

2) However, long-term target values can be set: due to factors such as product structure, there are differences in net interest rates in various regions, but we believe that the long-term net interest rate level should be basically consistent with the maturity of this region.

Starting from 2014-2018, we believe that the region’s net interest rate will change into an increase in the amount of per capita consumption, and gradually reach a stable net interest rate.

In the text, we use the prediction of the amount of peaches and plums per capita in the region to further predict the net interest rate of each region, and at the same time serve as a robustness test of the company’s profit forecast.

Tao Li VS Dali: 1) It is actually two different business models.

① Mode: Tao Li focuses on short-term high turnover, Dali blossoms more, and the indicator has a strong scale; ② Channel: Tao Li solidly trots, and the advantages of Dali channel network are obvious; ③ Brand: Tao Li is self-contained, Dali brand holds highhit.

2) Dali’s layout of the Meibachen is a challenge to Dali (cutting into different models) and a test of Taoli Moat.

Channel feedback Dali launched a price war in the first quarter, and Tao Li followed up accordingly, but the overall is still stable. We believe that the promotion of the transformation of Meibaochen ‘s margins in the future will slow down, and the pressure on Tao Li will also be reduced accordingly.

What’s even more fortunate is that the industry is also expanding under the joint efforts.

Estimates and investment recommendations: Growth track + high barrier companies, buy from a long-term 深圳spa会所 perspective, and give a “strong recommendation-A” rating.

Long-term growth gives the company different estimation logic, which gives a certain expectation that the estimate will fall, so a certain estimation premium can be given in the short term.

Based on a study of the company’s long-term value, we predict an EPS of 1 in 2019-2021.

12.1.

29, 1.

53, with reference to DCF results (converted to 40 at the beginning of 19).

1 yuan), given a 40X estimate for 2019, corresponding to a target price of 45 yuan, upgrade the rating to “strongly recommended-A” rating.

Based on our overall robust profit forecast, this correspondence is roughly 20X in 2023.

Risk reminders: 1. Demand falls; 2. Involved in increased spending 3. The promotion in South and Central China was less than expected.