On February 6th, Bull Group was listed on the main board of Shanghai Stock Exchange. Since then, it has been trading daily for 9 consecutive days. On February 17th, the closing price was 183.54 yuan/share, which was 28% higher than the issue price of 59.45 yuan, and its market value was as high as 11.1 billion yuan.

1. The socket business of Bull Group!

Bull Group was established in 1995, and has been deeply involved in the subdivision of "sockets" (converters), creating a brand image of "socket experts and leaders", which is well known to consumers.

Bull Group has been focusing on the field of sockets (converters) for 12 years since its establishment. In just six years, Bull has become the leader in China civil converter market, and in 21, Bull converter won the first place with a market share of over 2%. Up to now, bull converter has occupied nearly 5% of the market and is the absolute leader.

The gross profit margin of Bull Converter is higher than its main competitors, Power Future and Haoda Intelligent. Power future patch panel products are mainly supplied to Xiaomi, and sold to Xiaomi Communication at the price of "cost+agreed profit". Haoda intelligent patch panel business is a distributor of Philips brand, mainly for online sales, and does not produce itself.

In 27, Bull started a new business expansion and entered the field of wall switch sockets. Now, wall switch sockets have become another important pillar of Bull. In the domestic wall switch market in 218, Bull ranked first with 13.7% market share, followed by TCL with 1.9% and Siemens with 6.2%.

In p>214 and 216, Bull successively entered the field of LED lighting and digital accessories, and the LED lighting business has entered the growth period from the introduction period. However, compared with Opal Lighting and Foshan Lighting, the revenue of Bull LED has a huge difference, and the gross profit margin is about 1 points different from Opal Lighting.

Bull Group is a typical family business. Before 217, Ruan Liping and Ruan Xueping held 1% equity directly and indirectly. In December 217, Ruan Liping and his brothers transferred 4.12% equity to seven investors including Gaochun Capital at a price of 1.28 billion yuan. Before the listing, Ruan Liping and his two brothers directly and indirectly held 95.876% of the shares.

2. Steady growth in performance!

The operating income of Bull Group from 215 to 218 was 4.46 billion, 5.37 billion, 7.24 billion and 9.6 billion respectively. The company expects the revenue in 219 to be between 9.68 billion and 1.7 billion, with a year-on-year increase of 6.77%-18.1%.

Among the four categories of products of Bull Group, converters are mature pillar businesses, accounting for more than 5% of revenue, and wall switches are key businesses. From 216 to 219, H1's two core businesses accounted for 91.76%, 88.2%, 84.51% and 81.34% of revenue respectively.

In the product iteration generated by the alternation of new and old national standards in p>217-218, Bull Converter's revenue increased by more than 2% by virtue of its brand advantage. After stabilizing in 219, the converter's growth rate was only 2.41% in the first half of the year.

in the case of converter revenue growth rate of only 2.41%, the total revenue of H1 in 219 can still remain above 1%, which is inseparable from the contribution of other businesses. The growth rate of wall switches is 2.76%, the growth rate of LED lighting is as high as 59.96%, and the growth rate of digital accessories is 45.49%. But overall, the company's revenue growth rate showed a downward trend.

The net profit of Bull Group from 215 to 218 was 1 billion, 1.41 billion, 1.29 billion and 1.68 billion, respectively. In 217, the fastest revenue growth, its net profit decreased by 8.5%, and then the net profit growth rate returned to 2% in 218. Bull Group expects the net profit in 219 to be between 2.3 billion and 2.54 billion yuan, up by 37% year-on-year.

converters account for the most in Bull Group and have the greatest impact on Bull Group. From 217 to 218, the gross profit margin of converters suddenly dropped from 45% to 33%, and the gross profit margin of Bull Group also dropped from 45% to around 37%. Mainly due to the rising price of raw materials and the new national standard, the converter cost has increased.

in H1, 219, with the recovery of the converter's gross profit margin, the bull's overall gross profit margin also rebounded. In 218, the unit price of Bull Converter was 14.45 yuan, corresponding to a gross profit margin of 33.26%. In 219, the unit price of H1 Converter rose by .36 yuan to 14.81 yuan, corresponding to a gross profit margin of 39.84%. For products with low purchasing frequency and low price sensitivity such as converters, if Bull Group continues to raise prices slightly, there is still room for growth in gross profit margin.

Bull's gross profit margin is very sensitive to sales price and direct material price. A 1% increase in sales price can increase the gross profit margin by .6%, while a 1% increase in direct material price will decrease the gross profit margin by .5%.

3. Bull's industrial chain advantage occupies upstream and downstream cash flow!

In the sales model of Bull Group, distribution is the main mode, accounting for about 85%, and the gross profit margin of dealers is roughly between 36% and 4%, which is similar to that of Bull Group. This is mainly because Bull brand has a certain premium space, and dealers can also make profits by raising prices.

Bull's dealers are mainly small and scattered outlets such as hardware grocery stores, office supplies stores, supermarkets, building materials and lighting stores, and digital accessories stores, and 5% of the dealers are under 1 million and 1 million. The number of dealers who have cooperated for more than 5 years is the largest, accounting for more than 7% of the receivables of bulls, and the cooperation time of dealers is long and stable.

Bull dealers have 1 million terminal outlets, which is more than ten times that of competitors.

The huge network scale and comprehensive network coverage have formed the channel advantage of Bull, and also created a strong channel barrier for competitors, forming the moat of Bull.

Bull is in a strong position in the industrial chain, which can be seen from the comparison between accounts receivable and advance receipts. Dealers purchase goods from Bull mainly by the way of "payment first and goods later". The accounts receivable of Bull Group H1 in 216-219 were 76.27 million yuan, 12 million yuan, 211 million yuan and 11 million yuan respectively, while the advance receipts were 199 million yuan, 171 million yuan, 125 million yuan and 434 million yuan respectively.

In the first half of p>219, Bull's accounts receivable, prepayments and other receivables totaled 161 million, totaling 849 million, including the inventory needed for daily operations. In the same period, the accounts payable, advance payment and other payables of Bull totaled 2 billion yuan, and there was a balance of about 1 billion yuan after subtracting them. Through the payables and advance payment of partners, Bull can carry out production and operation.

4. Can the socket business support the market value of 1 billion yuan?

before going public, the bull had paid a high cash dividend. In 215, 216 and 217, Bull Group paid cash dividends of 5 million yuan, 585 million yuan and 2.255 billion yuan respectively, and the accumulated dividend for three years reached 3.34 billion yuan. Especially in 217, the dividend of 2.255 billion not only far exceeded the net profit of 1.29 billion in that year, but also almost took all the book cash. At the end of 217, the company's monetary funds were only 11 million.

by virtue of its position in the industrial chain, it occupies the cash flow of upstream and downstream, and the company is not short of money, and there are few loans.

In the past three years, Bull Group's net profit has grown at a compound annual rate of 2%, and the company expects its net profit in 219 to be between 2.3 billion and 2.54 billion.

Up to now, Bull Group has a market value of 11.1 billion, and its P/E ratio is about 45 times. Facing the compound annual growth rate of net profit of 2%, it is still very expensive! Overvaluation will overdraw the performance in the next few years.

whether bull group can achieve sustained growth in performance depends on whether the company can achieve new business growth points beyond sockets and wall switches.