研究报告全文：10Jan2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateVesync2148HKBUYUpSomebrandsmayturnaroundfasterthantheindustryTargetPriceHK623PreviousTPHK527SomepeerslikeHelenofTroyraiseditsguidanceforthefirsttimesinceJan2022UpDownside309Webelievecyclebottomfortheindustryislikelytobein2023andsomebrandsCurrentPriceHK476couldrecoverfasterThereforeweupgradeVesynctoBUYandraiseTPtoHK623basedon16xFY23EPEupfrom13xsimilartoindustrysaverageofChinaHomeApplianceSector17xItisnowtradingat12xFY23EPEand08xPEGwhichisnottoodemandingFY22EwasstillunderpressureDuetosluggishdemandin3Q22weWalterWooexpectVesyncssell-outGMVYoYgrowthtobeat30-40inFY22E358523761877625growthin1H222H22EAlsobecauseofAmazonsde-stockingin2Q-walterwoocmbicomhk4Q22sell-inGMVgrowthcouldbeevenslowerhenceweforecastonly15-25growthinFY22E2015inin1H222H22EAsaresultofStockDatabusinessmodelchangesinEUshiftingfromSellerCentraltoVendorCentralMktCapHKmn5524Avg3mthstoHKmn181andmore-than-expectedcouponsgiventhatmaydeductsalesdirectlywe52wHighLowHK900195expectlistedcolevelsalesgrowthtobeat10inFY22ENetprofitcouldTotalIssuedSharesmn11629alsobeunderpressureandmayfallby12inFY22Edueto1lower-SourceBloombergthan-expectedGPmarginwithmoreretaildiscountsgiveninordertodrivesalesastheindustryishighlypromotionalin2H22EretaildiscountsareShareholdingStructurehigherat30offduringtheCyberWeek2022vs26offin2021accordingMrYangYuzheng3162KarisILLC2095tosalesforceand2thesubsequentoperatingdeleverageKarisIILLC1397HHLRAdvisorsLtd845ButweareconservativelyexpectingaturnaroundinFY23EHoweverBankofCommunications293comparingtoFY22EwehaveturnedmorepositiveaboutFY23EbecauseTrusteeLtd1sell-outGMVgrowthhasmarginallyimprovedinNov2022roughly30-40FreeFloat2508growthduringCyberWeekandthetrendissustainingintoDec20222SourceHKExinventoryclearancebyAmazoncouldbeoversoonasVesyncsinventorydaysalreadyfelltoabout40daysinNov2022vs70to80daysinJan2022SharePerformanceAbsoluteRelative3freightratesarenowmuchcheaperwithWCIIndexfallingtoonly30001-mth-10-83USDper40footboxa70dropYoY4morenewproductlaunchesand3-mth578334categoryexpansionlikeLevoitsHumidifier100growthinFY22Eand30-6-mth084340growthinFY23EandCosorisAirfryersandOvensand5morenon2-mth-459-394SourceBloombergAmazonchannelsofflinepenetrationinUSespWalmartUKGermanyandJapanHenceweexpect1960salesnetprofitgrowthinFY23E12-mthPricePerformanceUpgradetoBUYandraiseTPtoHK623asthebottomshouldbenearHK2148HKHSIrebased10Wefine-tuneFY22E23E24Enetprofitby-7-41tofactorin19slowersalesgrowth2lowerGPmarginmorediscountsand3higher87operatingdeleverageCurrentvaluationof12xFY23Eisnottoodemanding6givenfasterthanpeerssalesnetprofitgrowthat1634itsPEGof08x54isrelativelyattractiveJSGlobalisonlyat10xwithslowergrowthHowever32sincecyclebottomshouldbenearwenowupgradeittoBUYandraiseTPto1HK623basedon16xFY23EPEupfrom13xvs3-yearaverageof15x0Jan-22Apr-22Jul-22Oct-22EarningsSummarySourceBloombergYE31DecFY20AFY21AFY22EFY23EFY24ERevenueUSDk348922454250501221597224695404AuditorErnstYoungYoYgrowth1030302103192164NPattUSDk5472341588365325861680134RelatedReportsEPSUSD004900360031005000691Vesync2148HKHOLDSalesandYoYgrowth5110254137605367costpressuremaypersistin2H22E17Aug2022ConsensusEPSUSDnana0050006800832Vesync2148HKBUYHigherPEx12616919612289developmentalcostsbutbettertariffsPBx26231917144Apr2022Yield27262033453Vesync2148HKBUYFY22EguidancemaintainedbutweareROE21013299137158prudent29Dec2021NetgearingNetcashNetcashNetcashNetcashNetcashSourceCompanydataCMBIGMestimatesnetdebtcashequityPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk10Jan2023Industryoutlook2023TurnaroundinthemakingsomebrandscouldrecoverfasterAccordingtoUSCensusBureauretailsalesofelectronicsandappliancestorescontinuedtobeweakbyfallingabout6YoYin11M22andbasedonTheNPDgroupUSconsumertechnologyindustrysalesisexpectedtodropby8in2022Butfor2023TheNPDgroupforecastedtheindustrysalestodropbyanother5in2023asconsumerscontinuetotightentheirpurchasingpatternsinresponsetohighinflationandinterestratesFromourpointofviewthiscouldbeapositivesignastheworstcouldbegonein2023andwealsobelievesomebrandscoulddobetterandbottomoutsoonerthanothersAsareferenceHelenofTroyHELEUSalsoreportedits3Q22Sep-Novresultslastweekandannouncednotonlya10staffcutbutalsoaraiseofthelowendofitsFY23EguidanceThisisthefirstupwardrevisionssinceJan2022whichalsopointedoutaQoQimprovementoninventorylevelhencewearefairlyencouragedEventhoughinventorylevelforAmazonandWalmartarestillclimbinglatelybasedonourresearchsomecategoriesandbrandslikeVesyncandJSGlobalshouldhavepeakedoutandcouldseeamuchmoresimilarsell-inandsell-outgrowthin2023EarningsrevisionFigure1EarningsrevisionNewOldDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue501221597224695404533514636058762209-61-61-88Grossprofit194040243961291078214724258429309047-96-56-58EBIT427157111696436482917405595432-115-4011Netprofitatt365325861680134391936105179159-68-4012DilutedEPSUSD003100500069003400520068-68-4012Grossmargin387408419402406405-15ppt02ppt13pptEBITmargin8511913991116125-05ppt03ppt13pptNetprofitattmargin73981157396104-01ppt02ppt11pptSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue501221597224695404531000641600747500-56-69-70Grossprofit194040243961291078216117258180310026-102-55-61EBIT4271571116964366196080740104250-311-119-75Netprofitatt365325861680134521206848088625-299-144-96DilutedEPSUSD003100500069005000680083-374-255-176Grossmargin387408419407402415-2ppt06ppt04pptEBITmargin85119139117126139-31ppt-07ppt-01pptNetprofitattmargin739811598107119-25ppt-09ppt-03pptSourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE210Jan2023ValuationPeersValuationFigure3Peersvaluation12mUpROE3yrsYieldPriceMktCapYearPExPBxTPDown-PEGxCompanyTickerRatingLCLCsideHKmnEndFY1EFY2EFY1EFY2EFY1EFY1EFY1EAHsharesSmallHomeAppliancesVesync2148HKBUY623476315535Dec-2119612219171450820JsGlobalLifestyle1691HKBUY118310301535995Dec-211169821182311635Joyoung002242CHNRna1749na15465Dec-2118916231301494247ZhejiangSupor002032CHNRna5245na48896Dec-2120418252472822738Xinbao002705CHNRna1734na16526Dec-2112911420181620727BearElectric002959CHNRna6684na12021Dec-2128323145391591415EcovacsRobotics603486CHNRna7564na50009Dec-2124019567533543215BeijingRoborock688169CHNRna27065na29232Dec-2118215526221442506KingcleanElectric603355CHNRna2971na19667Dec-2117415649432510535Avg19015737322092027Med18915631301621627AHHomeAppliancesMidea000333CHBUY6779541125436364Dec-2112511326232302035GreeElectric000651CHNRna3409na221302Dec-21756817152740973HaierSmartHome600690CHNRna2556na271452Dec-21158137262317530423HaierSmartHome6690HKBUY27302895-6271455Dec-21154133262317543625HisenseHome921HKNRna1100na21963Dec-21927612101040442HisenseHome000921CHNRna1624na21963Dec-2116713520181040720WhirlpoolChina600983CHNRna690na6096Dec-21nananana141nanaHangzhouRobam002508CHNRna3052na33389Dec-2115413629251350822Vatti002035CHNRna578na5648Dec-21105931412620336Avg12911121191249934Med13912323201350830InternationalSmallHomeAppliancesTechtronic669HKNRna94na171819Dec-2119217040352481621SmithAOCorpAOSUSNRna61na73280Dec-2119919256522723919HelenOfTroyLtdHELEUSNRna111na20799Feb-22120137191610434naDeLonghiSpaDLGIMNRna22na28196Dec-2120316321191081621IrobotCorpIRBTUSNRna48na10286Jan-22nana2427359na00SebSaSKFPNRna90na41468Dec-211713416151333820BrevilleGroupBRGAUNRna20na15316Jun-222521839351893216KoninklijkePhilipsPHIANANRna15na113780Dec-2117314111112220655Avg18616528261140922Med19216322231611620InternationalHomeAppliancesWhirlpoolWHRUSNRna15150na64434Dec-2180912019840546Ingersoll-RandIRUSNRna5512na174246Dec-212422222524780901ElectroluxAb-BELUXBSSNRna157na33350Dec-21700109272464768340DaikinIndustries6367JPNRna20250na350565Mar-2222820727241163011Panasonic6752JPNRna10955na158785Mar-221079208076417228FujitsuGeneral6755JPNRna3040na19632Mar-222352022322440411LgElectronics066570KSNRna95100na97721Dec-2290630807740413Samsung005930KSNRna60700na2275359Dec-2220612312111184825Avg23613919178092822Med2171162220760719SourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE310Jan2023Figure4PEvaluationband700HK60050040030020010000Dec-20Sep-21Jun-220x3x99x168x237xLastpriceSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE410Jan2023AssumptionsFigure5CMBIsassumptionsUSDmnFY19AFY20AFY21AFY22EFY23EFY24ESalesbyregionUSDkNorthAmerica148634302318358060383521443191502862Europe21976407188104197249126424158030Asia1309588615149204512760934511Total171919348922454250501221597224695404SalesgrowthbyregionNorthAmerica229103418471156135Europe-19853990200300250Asia-5234971574350350250Total1881030302103192164SalesgrowthbysegmentSellerCentral-187230-270-950-5000VendorCentral1108166745426411985Othersincludingoffline44086001976700650500GPmarginsbyregionNorthAmerica393445399400420425Europe378380340340370400Asia441430370370400410Total391437388387408419GPmarginsbysegmentSellerCentral347410330320330335VendorCentral436461411399428447Othersincludingoffline257230300320330335OpexbreakdownAP-85-35-47-65-73-73Commissiontoplatform-75-49-28-01-01-01Staffcost-Opex-57-58-70-89-80-72Warehousing-23-18-39-44-42-42RD-48-30-38-43-45-45Officeexpenses-10-08-09-08-07-06DA-Opex-07-06-08-07-05-04Sellingdistributioncostssales-220-135-152-157-158-155Adminexpensessales-124-112-113-125-121-114OPmargins4817611487121140Effectivetaxrate-81-89-185-100-150-150NPattmargins37157927398115NPattgrowth4617588-240-122605367AdjustedNPattgrowth4617588-240-122605367SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE510Jan2023FinancialSummaryIncomestatementCashflowsummaryYE31DecUSD000FY20AFY21AFY22EFY23EFY24EYE31DecUSD000FY20AFY21AFY22EFY23EFY24ERevenue348922454250501221597224695404EBIT6132851279427157111696436NorthAmerica302318358060383521443191502862DA7921403996892851Europe407188104197249126424158030Changeinworkingcapital56804113402142025175453139704Asia588615149204512760934511Incometaxpaid1384782240591034414141Others571721863116512391361Costofgoodssold196503278143307181353263404326Netcashfromoperating964846680182841112550224211Grossprofit152419176107194040243961291078Otherincome331712-2506597695Capexinvestments133316547437152086064Associatedcompanies-----Operatingexpenses91422125540148819173442195338Interestreceived-225---AP1227021165325794359750764Others498830000---Commissiontoplatform1718012839343361379Netcashfrominvesting632146322437152086064Staffcosts2017731851447994759350212RD1045917308215532687531293Equityraised19260528875---Otheropex3133642377495465501562689Netchangeinbankloans15466684---EBIT6132851279427157111696436Dividendpaid422418561185481523Others18064334289030323178Financecostsnet113098212421562161Netcashfromfinancing17110966641565830183155JVsassociates-----Exceptional141172---Netchangeincash17443686338194129120776214992Pre-taxprofit6005751009405916896094275Beginningcashbalance9115183450126659320788200012Exchangedifference10129547--0Incometax5334942140591034414141Cashattheendoftheyear183450126659320788200012415004LessMinorityinterests00000Netprofit5472341588365325861680134BalancesheetKeyratiosYE31DecUSD000FY20AFY21AFY22EFY23EFY24EYE31DecFY20AFY21AFY22EFY23EFY24ENon-currentassets3060245138481145206856937SalesmixFixedasset1858447775891165116629NorthAmerica8779777472Intangibleassetsgoodwill40628815343-66Europe1218192123Prepaidleasepayments1105612398123981239812398Asia23455Interestinjointventures-12202122021220212202000Othernon-currentassets1728215773157731577315773Total100100100100100Currentassets339122415669546324562849721507PLratiosInventories95598128547118999165683160148Grossmargin17611385119139Tradeandotherreceivables352411060194984813587380379Operatingmargin17211281115136Prepayments2457721721239672855833252Pre-taxmargin157927398115Othercurrentassets25632723327233272332723Netmargin89185100150150Cashandcashequivalents183450126659320788200012415004Effectivetaxrate437388387408419157927398115Currentliabilities97395132816211368173215256584BalancesheetratiosBankloans288834900349003490034900Currentratiox3531263228Tradepayables456173773911247166510141894Quickratiox2522202322Accrualsotherpayables2721736945407654857356558Cashratiox1910151216Taxpayables1704017084170841708417084Inventoryturnoverdays120147147147147Others46336148614861486148Tradereceivablesdays2857575757Tradepayablesdays6055555555Non-currentliabilities1219813353133531335313353Totaldebttotalequityratio2121198Bankloans----0NetdebtequityratioNetcashNetcashNetcashNetcashNetcashDeferredincome----0ReturnsDeferredtax----0ROE21013299137158Others1219813353133531335313353ROA148906195103PershareMinorityInterest00000EPSUSD005004003005007Totalnetassets260131314638369718428348508506DPSUSD002002001002003Shareholdersequity260131314638369718428348508506BVPSUSD023027032037044SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE610Jan2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE7