Gujia Home (603816): Proposed share repurchase for equity incentives to demonstrate long-term development confidence

Gujia Home (603816): Proposed share repurchase for equity incentives to demonstrate long-term development confidence
The company’s recent situationThe company announced that it plans to repurchase the company’s shares with its own funds of 300 million to 600 million US dollars in the next 12 months. The repurchase price does not exceed 50 yuan per share. It is estimated based on the highest repurchase amount and the highest repurchase price.The number of shares purchased was 12 million, accounting for 1 of the total share capital.99% of the shares repurchased this time are used for equity incentives. Comment 1. The repurchase funds have a small financial impact on the company, and the repurchased shares are used for equity incentives to demonstrate long-term development confidence.The maximum amount of the company’s repurchase is 6 trillion, which accounts for the company’s total assets and the proportion of the net assets attributed to the parent is 5, respectively.64%, 11.90%, 1H19 company currency funds 17.900 million US dollars, the account is rich in cash, we expect the release of the repurchase will have a small financial impact on the company. The company’s repurchased shares are all used for equity incentives, continuing the company’s well-known tradition of team incentives (the company also used a stock incentive plan to motivate nearly a hundred core teams in 17 years), which is beneficial to further binding the interests of the top and bottom.The subpoena price of 50 yuan is a 36% premium to the closing price on September 20, demonstrating the confidence of the management team’s subsequent development. 2. Domestic sales promote the reform of the regional retail center system, and foreign sales mostly deal with trade frictions. In terms of domestic sales, the company began to promote the construction of a regional retail center system in the second half of 2018, further diminishing its power at the organizational level and accelerating the response to market changes. At the same time, it increased its efforts to promote the construction of terminal information technology and strengthen channel control.In response to trade frictions, we will expand the consensus with downstream customers to jointly increase tariffs. At the same time, we will comprehensively respond to the impact of tariffs in terms of cost control and product structure optimization. According to the recent announcement, excluding the influence of mergers and acquisitions, the revenue / net profit growth rate of the company in 1H19 was 0.57% / 11.23%, with the company’s internal sales organization structure adjustment effect appearing, marketing efforts increase, we expect the Q3 company’s internal growth rate to try to stabilize and recover. 3. Strengthen the refined management of the target of mergers and acquisitions and improve the synergy effect.In 2018, the company acquired Natuz, Xibao Home, Priority Home and many other companies. We expect that in 2019, the company will focus on the integration of existing targets and improve efficiency. In 1H19, 23 new stores were opened by Natuz.Its investment 天津夜网 in furniture exhibitions, products and brands has produced certain synergies. Priority Home has established a new management board, the procurement system has been completed and benchmarked with the Gujia system. The order volume of major customers in 1H19 has increased significantly.Synergistic development between the two parties after the replacement of the company. Estimates suggest maintaining earnings forecasts.At present, it generally corresponds to 19/16 times 19/16 times P / E, maintain outperforming industry rating, and maintain target price of 42.6 yuan unchanged, corresponding to 19/20 22/18 times P / E, corresponding to 15% growth space. Risks Raw material prices fluctuated sharply, and Sino-US trade friction exceeded expectations.