(Report Producer Analyst: Hua Chuang** Wang Binpeng, Lu Xingze, Guo Yaxin).
(1) Company profile: "focus on improving the quality of life" PPR pipe faucet
Founded in 1999 in Zhejiang, China, Weixing New Materials was listed on the Shenzhen Stock Exchange in 2010, and two years after listing, the company pioneered the "Star Butler" service in the industry, and continued to improve and upgrade it, laying the brand position of "high-end pipeline model" in one fell swoop, and becoming a leading enterprise in household PPR pipes.
Since 2016, the company began to lay out concentric circle business, and gradually extended to overseas markets, at present, the company in Zhejiang, Shanghai, Tianjin, Chongqing, Xi'an, Thailand has built six modern production bases, its products include Weixing tube, Weixing heating, Weixing Kale waterproof, Weixing water purification, Weixing kitchen and bathroom, home decoration system and other categories, adhere to the "product + service" model to provide customers with system solutions.
Since 1999, Weixing New Materials has gone through 25 years of development, with profound heritage and timelessness, adhering to the brand mission of "focusing on improving the quality of human life", actively laying out internationalization, and striving to become a first-class enterprise with high technology, service and internationalization.
The company's largest shareholder is Weixing Group, holding 3790%, the actual controllers are Zhang Kapeng and Zhang Sanyun, who hold Weixing New Materials directly and indirectly. 9% equity, accounting for 217%。As of October 27, 2023, the company's top ten shareholders hold a total of 74% of the shares, with relatively concentrated shareholdings, and stable shareholdings by major shareholders, with little change since listing.
The company values employee motivation and return on investment for shareholders. Since its listing in 2010, Weixing New Materials has paid cash dividends 13 times, with a cumulative cash dividend amount of more than 6.7 billion yuan and a dividend rate of 6826%, benefiting all shareholders, and the dividend payout ratio is stable and high. In terms of incentives, the company has issued three equity incentive plans, in 2011, 2016 and 2020.
(2) Main business: pipe revenue accounts for nearly eighty percent, and concentric circles grow rapidly
The company is mainly engaged in the manufacture and sales of various types of new plastic pipes, and its main products include PPR pipe fittings, PE pipe fittings and PVC pipe fittings, with revenue accounting for % in 20227.6 billion, accounting for 9 percent of total revenue72%, accounting for a rapid increase in the past two years (other main business income in 2022 includes the revenue contributed by Singapore Jetstream for the first time).
1) PPR series pipe fittings:Mainly used for hot and cold water supply in the building, the vast majority of the company's PPR pipes are sold through retail channels, and the main customers include home improvement companies, plumbers and foremen, owners self-purchased, etc., because most of the PPR products are retail channels and come with "star housekeeper" services, the overall profitability is high, and the gross profit margin is generally about 55%;
2) PE series pipe fittings:Mainly used for municipal water supply, heating, gas, drainage and sewage, etc., mainly engineering channels, gross profit margin is lower than PPR pipes, and general consumption building materials, about 30% between 35%;
3) PVC series pipe fittings:It is mainly used for drainage and sewage and power sheath, etc., and has been applied in home decoration and engineering, with a gross profit margin of about 20 30% before 2020, and has declined in the past two years, falling to about 15%;
4) Concentric circle products:It mainly refers to the two major businesses of home improvement waterproofing and water purification, mainly retail channels, and can form a certain synergy with the main business PPR products, with a gross profit margin of about 40%, which is equivalent to the company's comprehensive gross profit margin.
Look at the channels by channel,In 2022, the company's retail revenue accounted for 64%, most of which were distribution channels, and the engineering business was jointly carried out through direct sales and distribution channels, accounting for 36% of revenue in 2022, and on the whole, the company's distribution revenue accounted for 76% and direct sales revenue accounted for 24%.
Since its listing, the company's revenue in East China has always maintained steady growth, except for the rapid increase in the proportion of hardcover rooms and fully equipped houses in 2019. North China and Western China accounted for the second largest proportion, accounting for about 13 14% of the revenue in 2022, and Central China, Northeast China, and Southeast China each contributed % of the revenue.
Overseas,In 2022, the company achieved overseas revenue of 27.7 billion yuan, +74% year-on-year, accounting for 4%, mainly due to the continuous promotion of regional layout such as Thailand, as well as the new consolidation of Singapore Jetstream.
(1) Overview of the pipe industry
Plastic pipes belong to one of the branches of chemical building materials, mainly made of PVC (polyvinyl chloride resin), PE (polyethylene resin), PP (polypropylene resin) and other polymer materials as the main materials, through plastic extrusion, injection molding and composite molding technology.
Compared with traditional pipes such as cast iron pipes, galvanized steel pipes, and cement pipes, plastic pipes have the advantages of energy saving, environmental protection, light weight and high strength, corrosion resistance, easy construction and maintenance, and long service life.
In the 90s of the 20th century, plastic pipes were introduced into China, and in the 21st century, they officially entered the stage of industrialization development, and have been widely used in building water supply and drainage, outdoor water supply and drainage, city gas, electricity and optical cable sheath, industrial fluid transportation, agricultural irrigation and other construction, municipal, industrial and agricultural fields. According to the annual report of AD shares, in 2021, the national output of plastic pipes will reach 16.77 million tons, a year-on-year increase of +25%, according to Weixing New Material's 2022 annual report, it is expected that the total output of the industry will be flat or slightly decline in 2022, and the scale of the industry has been stable in recent years.
*In terms of referring to the average price of China Lesso products in 2022, the average price of PVC is 0880,000 tons, the average price of non-PVC is 160,000 tons, according to PVC accounted for 55%, non-PVC accounted for 45%. It is roughly estimated that the output value of the industry is nearly 200 billion yuan.
The upstream of plastic pipes is the petrochemical industry, and the trend of raw materials is mostly positively correlated, and the downstream industries are construction, municipal, gas, etc.
The common plastic pipes in China mainly include PVC, PE, PPR, and the home improvement field is mainly based on PPR and PVC.
PVC pipes are more mature, mostly used in building drainage and wire casing, PE and PPR pipes are widely used in municipal pipelines, building water supply and other fields due to their excellent performance, health and environmental protection, but due to the relatively low PVC**, it still occupies a major position in the domestic plastic pipes, according to the Huajing Industry Research Institute, PVC production accounts for about 50%, PE accounts for about 25%, and PPR accounts for nearly 10%.
According to ShineWing's "Brief Development of Polyvinyl Chloride (PVC) Industry", according to the application field, municipal water supply and drainage, agriculture, and building water supply and drainage are the three main application fields of plastic pipes, accounting for about %.
(2) Market size calculation: the market size of PPR pipe interior is about 20 billion
1. Terminal angle calculation (interior market).
There are two main types of common home improvement PPR pipes: 4 pipes and 6 pipes, and the main difference is that the pipe diameter is different. According to Qeeka Home, the outer diameter of the 4 pipes is 20mm, which is often used for self-built houses, low-rise residences or villas, while the outer diameter of the 6 pipes is 25mm, which is suitable for high-rise residences or areas with large water consumption. In addition, the decoration of water pipes also requires a variety of accessories such as 90-degree elbows, 45-degree elbows, and tees.
We have compared the ** of home improvement PPR pipes from different channels to calculate the market size:
1) Refer to Tmall*** PPR pipes and accessories for one kitchen and one bathroom** in a few hundred yuan to 1000+, and ** for one kitchen and two bathrooms** in a few hundred yuan to nearly three thousand, with a large price difference;
2) Refer to the decoration ** of Shanghai Decoration Network, 70mmm2 residential, PPR pipes and accessories ** are 1920 yuan, 1920 yuan, 2880 yuan respectively (material costs, excluding labor);
3) To sum up, the assumption of our following calculation is: the cost of PPR pipes and fittings for 100m2 commercial housing is about 2,000 yuan.
We estimate that the market size of PPR pipes is about 20 billion (calculated at the ex-factory price).
1) New commercial housing market:From 2022 to 2023, the sales area of commercial housing in the country will be 13600 million square meters, 11200 million square meters, according to 100 square meters per house, about 2,000 yuan per set of hydropower materials, the corresponding market size is 27.2 billion yuan, 22.4 billion yuan;
2) New Rural Housing Market:From 2012 to 2019, the area of rural residential housing completions nationwide increased from 8800 million flat down to 5600 million square meters, we assume that the average annual completed area of rural housing is about 500 million square meters, considering that the rural residential units are larger and the unit price is lower, so we assume that each residential surface is 120 square meters, and the water and electricity decoration is 1200 yuan and 1500 yuan, and the PPR pipe market size corresponding to the new rural houses is estimated to be about 6 billion;
3) Stock housing market:It is difficult to measure the demand for stock housing, and the selected base, renovation frequency, age and other hypothetical factors will lead to a large deviation in the calculation results. Due to the long service life of PPR pipes, we only consider the second-hand houses that are traded every year, and refer to the data of CRIC Research Center, the transaction area of second-hand houses in 30 key cities in 2023 is 1800 million square meters, assuming that 50% and 80% of them are reconstructed for hydropower, the corresponding PPR pipe market size is about 1,829 billion.
4) Limitations of the measurement:The above calculation does not take into account the first projects such as affordable housing and talent apartments, and the calculation of stock housing only considers 30 key cities, and other cities are not included, so the overall calculation results are expected to be small.
To sum up, we estimate that the terminal market size (interior decoration) of PPR pipes in 2023 will be more than 30 billion, assuming that the ratio of ex-factory price to terminal price is 1:2, the market size of the production end will be about 15 billion or more.
The proportion of real estate centralized procurement is relatively low. According to Aowei Cloud Network, in 2022, there will be 145 new projects in China's real estate fine decoration market830,000 sets, down 49 percent year-on-year0%, accounting for an estimated 10%+ of the number of commercial housing sales, considering that the rural market and the stock housing market also account for a considerable proportion, and the centralized procurement market** may be lower than the channel market, so we estimate that the proportion of the real estate centralized procurement market in the PPR market may be lower. On the whole, the first-tier cities show a high proportion of heavy equipment and centralized procurement, and the third- and fourth-tier cities show the characteristics of a high proportion of channels.
2. Calculation of production angle
We have recalculated the market size of PPR pipes from a production perspective::
According to the scale of the industry we introduced above, and considering the decline in real estate investment in the past two years, we assume that the current output of plastic pipes is 15 million tons, of which 10% are PPR pipes, and the unit price is 240,000 tons estimated [1], the estimated scale of the PPR industry is about 36 billion, referring to Zhuochuang information, in the application field of PP pipes, the proportion of water supply in the building is about 60%, and the corresponding market size is about 21.6 billion yuan.
(3) Market structure: The brand characteristics are significant, and the industry pattern is stable
There are about 3,000 plastic pipe enterprises above designated size in the country, including about 300 enterprises with an annual production capacity of more than 10,000 tons, and about 20 enterprises with an annual production capacity of more than 100,000 tons.
PPR pipe fittings belong to the subdivision of the track, mostly used in the field of interior decoration, the consumer attributes are stronger than other types of plastic pipes, the main manufacturers include listed companies in Weixing New Materials, China Lesso, AD shares, Gudi Technology, Xiongsu Technology and non-listed companies in Rifeng, Jinniu, Zhongcai, etc.
We refer to the proportion of PPR revenue of China Liansu and Gongyuan (both of which are about 13%) and the proportion of PPR output value in the plastic pipe industry (about 12% or more) to estimate the PPR income of non-listed pipe enterprises, and it is estimated that the PPR market CR5 is about 40 50%, which is more concentrated than other building materials and has significant brand characteristics.
1) Listed companies:Weixing New Materials, which is mainly in retail channels, and China Lesso, A.D., Gudi Technology, and Xiongsu Technology, which are mainly in engineering channels.
Weixing New Material's PPR revenue in 2022 is about 3 billion, and we estimate that the output will be more than 100,000 tons, and the scale of the retail channel far exceeds that of its peers.
China Lesso disclosed that the revenue scale of non-PVC pipes is close to 10 billion, considering that its average price is about 150,000 yuan 160,000 tons (PPR pipes ** are significantly higher than PE pipes), it is estimated that most of its non-PVC products are mainly PE, we refer to the unit price of various pipes in 2016-2018, according to PE pipe 110,000 tons, PPR pipe 240,000 tons, it is estimated that PPR accounts for about three or four percent of Liansu's non-PVC pipes, corresponding to about 4 billion PPR revenue in 2022, accounting for about 13% of the company's total revenue;
The PPR revenue of AD Co., Ltd. in 2022 is about 1 billion yuan, and the PPR revenue of Xiongsu Technology and Gudi Technology in 2022 is less than 200 million yuan;
2) Non-listed companies:Rifeng, Jinniu, Pinsheng, Longsheng, etc., which are mainly retail channels, and Zhongcai Pipeline, which is mainly based on engineering channels, are positioned similar to Weixing New Materials, and the products are mainly retail channels, and at the same time provide after-sales services such as authenticity inspection, product testing, and warranty for 50 years, while the latter is mainly engineering channels, with more product types and an annual production capacity of 2 million tons.
Nippon Tube:Headquartered in Foshan, it has a number of large-scale modern production bases in Foshan, Tianjin, Hubei and other parts of the country, hundreds of pipe production lines, with a revenue of 8 billion yuan in 2022 and hundreds of millions of meters of new pipelines sold every year;
Taurus Tube:The main PPR production enterprises in Central China have two production bases in **kou and Ezhou, and tens of thousands of terminal outlets across the country;
Zhongcai Pipeline:The key industry of Zhongcai Group's chemical building materials industry can produce various types of pipes such as home decoration, municipal, and construction, with an annual production capacity of 2 million tons and an annual output value of nearly 20 billion;
Poly Pipe:AKCOME Group's pipe brand has five production bases in Henan, Hunan, Zhejiang and other places, with an annual production capacity of 50,000 tons of PVC and 8,000 tons of PPR, and we estimate that the output value of PPR is over 100 million.
Compared with other consumer building materials, PPR pipes are concealed projects, but the brand attributes and quasi-consumption attributes are stronger, which further makes the industry have the characteristics of higher concentration, better profitability and stronger bargaining power for the downstream.
We believe that although the scale of the PPR track is small, the industry has completed the establishment of branding earlier, and the player pattern in the industry is stable, the profitability is strong, and the business risk is low.
For the consumer building materials enterprises that are in transition, the growth process of Weixing is also of great research significance.
(1) Where does high profitability come from: the natural consumption attributes of PPR products + the brand power created by differentiated services + flat channel network
We reviewed the company's development history in the past 20 years, and looked at the stable growth and high profitability of Weixing New Materials from the four perspectives of production, channels, brands and categories
Most of the market believes that Weixing's high profitability comes from the business model of "product + service", but if we compare with other manufacturers in the same industry, such as the PPR business of AD shares, we can find that even if the service attribute is weak, its profitability is still better, although it is weaker than Weixing, but it is still significantly higher than ordinary building materials or other categories of pipes. In addition, in longitudinal comparison, Weixing's main business also maintained a good level of profitability before 2012.
We believe that the highly fragmented end customers (consumption attributes), obvious product pain points (functional attributes), and relatively low sensitivity (low total cost of decoration) have jointly laid the foundation for the high profitability of the PPR industry, on top of this, the company has further strengthened the brand image of "high-end pipeline model" by hiring spokespersons, cracking down on counterfeit and shoddy products, and pioneering a series of brand building actions such as "product + service" business model, and will raise the profit center again.
At the same time, the company continues to improve the layout of bases and channels nationwide, continues to promote the construction of automation and informatization, builds a flat marketing network, and achieves "cost reduction" from the production side in terms of freight, labor, manufacturing costs, etc., and the sales side enhances the "availability" of products while building brand awareness through the layout and control of the flat channel network, so as to achieve nationwide coverage and continue to strengthen the competitive advantage.
In the long run, we believe that the brand awareness and consumer reputation built by the company through PPR will become a good foundation for multi-category expansion, with "water" as the core, building a concentric circle of "waterproof and water purification", and on the basis of sustainable high-quality operation, growth is still expected.
1. The natural attributes of PPR products: consumer goods, functionality, and low unit price
PPR pipes are mainly used for interior decoration, in terms of conventional house types of about 100 square meters, the amount of materials for water pipes and accessories is generally less than 2,000 yuan, with an average of about 10 yuan per meter, accounting for a small proportion of the total amount of decoration, but the quality of water pipes and the guarantee of the later stage have a greater impact on the quality of living, and the product itself has certain functional attributes, so the natural sensitivity is lower; In addition to Weixing, although PPR is not high in the proportion of revenue, its PPR profit has also remained at a high level, especially after 2014, its profit center has increased significantly;
2. The company takes service as the starting point to create a high-end brand image
Before 2012, the company's PPR gross profit margin was basically maintained at a high level of 35% 50%, although the fluctuation is large, but in fact, the profitability is also at a relatively good level, and there is no absolute regularity between cost and profitability, taking 2008-2009 as an example, the company has achieved two consecutive years of gross profit margin improvement in the case of raw materials rising and then falling.
After 2016, the gross profit margin of the company's PPR pipe fittings was stable at more than 55%, and only slightly less than 55% in 2022, but the overall profitability is still significantly better than the company's comprehensive gross profit margin, and the profitability is stronger.
We believe that the significance of "Star Butler" is not only to improve the added value of the product, but more importantly, it can directly reach customers, enhance the brand tonality, and occupy the minds of consumers through this service.
Star Butler Service Introduction:After consumers purchase a full set of Weixing tubes in the local Weixing tube store decoration company and install them, they can make an appointment for free with the service voucher for the "Star Butler" door-to-door acceptance service (except for cross-regional and remote areas), and check the tightness of the pipeline through product authenticity inquiry, professional hydraulic pressure test, take pictures of the pipeline direction diagram, inform the use of precautions and other system services, so as to avoid most of the hidden dangers in the pipeline system. (Double warranty refers to product quality + welding quality assurance).
3. Flat channel network strengthens competitive advantage
The company's retail market adopts the channel model of "direct + flat", in which the direct market is directly managed by the branch retail outlets, which is similar to the distribution model, mainly playing the role of a test field and a training ground, which can be used to promote new products and train marketing personnel; The dealer network is flatter than its peers, usually 2 3 levels, i.e. "sales branches, offices, first-level distributors, second-level distributors (may not have sales outlets)".
The company has more than 40 branches and offices across the country, through the establishment of branches can better realize the development of dealers, support, management and other work, compared with the same size of building materials companies, the channel network is more dense, in the financial statements is reflected in the "high gross profit, high rate, high sales staff proportion".
In terms of downstream customers, the company's retail business is mainly for home improvement companies, foremen, and owners, of which home improvement companies in first- and second-tier cities account for a relatively high proportion, and other areas are mainly purchased by plumbers and owners.
(2) The five major bases are distributed across the country, and there is still room for improvement in market share
The transportation radius of the company's main product PPR pipe is generally about 1000 kilometers, and the transportation radius of general building materials is about 300-500 kilometers.
We look at Weixing's future growth space from two perspectives:
1) Regionally, East China accounts for more than half of the revenue, and the market share is higher than that of the whole country.
At the beginning of the company's listing, the revenue in East China accounted for about 60%, and then with the promotion of national business, the proportion decreased slightly, but it was basically stable at more than 50% (except for 2019-2020, which was affected by hardcover houses in East China, which was less than 50%). In 2022, the total GDP of East China will account for 38% of the country, and the investment in real estate development will account for about 40% of the country.
2) Benchmark the industry pattern of other common consumer goods:PPR pipes have a certain functionality, at the same time, the product difference is small, the brand value and service value are higher, in addition, the channel layout has a greater impact on the choice of end customers, and the attributes are more similar to consumer goods, so we compare the industry pattern of common consumer goods such as meat products, packaged mustard, air conditioning, beer, etc., CR5 is more than 50%, or even more than 70%, and the leading market share can reach more than 30% (such as Midea).
1. Hold high and fight high, and the main business model empowers concentric circles
In 2016, Weixing put forward the "concentric circle" strategy, that is, the use of the original channel resources, and actively layout the two major fields of waterproof and water purification.
The company adopts the way of holding high and fighting, following the high-end positioning mode of the main business of "product + service", and the waterproof project aims to be "the best engineering system in the field of home decoration", enters the market from a high starting point, and innovates the "product + service" model; The water purification project takes water health as its own responsibility, and promotes it through product iteration and upgrading, professional operation and the same channel.
In 2022, the company achieved other product revenue of 67.6 billion yuan, +65% year-on-year, accounting for nearly 10% of total revenue, and in terms of profitability, since 2020, other products have been close to the company's comprehensive gross profit margin.
We believe that the company's two concentric circles of waterproof and water purification are consistent with the tone of the main business, and have good synergy in product positioning, brand image, and channel layout, and are expected to open up growth space by increasing customer order value in the future.
1) Product Perspective:Waterproof, water purification and PPR pipes are similar in that they all have certain functional attributes, and are all related to household water, and the application scenarios are the same, which makes it easier for consumers to broaden their perception of the brand.
2) Brand Perspective:Weixing's star butler service and high-end brand image are deeply rooted in the hearts of the people, and on this basis, similar "water" products are broadened, and the high-end brand positioning can be directly grafted;
3) Construction sequence:Home decoration waterproofing is generally closely related to hydropower transformation, and hydropower decoration is the first link of home decoration, with good drainage attributes; In addition, the installation of water purifiers (pre-filters) also needs to reserve the waterway or potential in advance, or the original waterway to be modified to a certain extent;
4) Channel synergy:The company's waterproof and water purification business has certain service attributes, such as Weixing Waterproof provides product + service double warranty, Weixing Water Purification provides door-to-door installation and after-sales service, and star housekeeper services and foreman resources can be shared across the country.
2. The customer unit price space is opened, and the second growth curve can be expected
The potential space of the whole house unit price is more than 3 times that of PPR pipes. PPR demand is mainly related to the home improvement market, the market demand is stable, but the scale is small, and the layout of waterproof, water purification and other businesses has opened up the company's long-term growth space. Generally, the cost of waterproof materials for home decoration is about 1,000 yuan, which is slightly lower than PPR pipes and accessories.
The cost of water purification ranges widely. The whole house water purification usually includes four parts: pre-filter, water purifier, water softener and end water purifier, consumers can choose according to their needs, the pre-filter is relatively low, generally around a few hundred yuan, ** water purification, water softener, and end water purification are at the level of 1,000 yuan, and the whole house water purification can reach 10,000 yuan. If calculated according to the combination of waterproof + end water purification, the estimated value is about 2 times that of PPR pipes.
Considering the larger supporting space for water purification and the regular replacement of consumables such as subsequent filter elements, it is estimated that the potential space of the unit price of the whole house (i.e., PPR pipe + waterproof + water purification) will be more than 3 times that of the current one.
3. Acquired Zhejiang Kerui to help upgrade the "system integration + service" model
In September 2023, the company acquired 60% of the shares of Zhejiang Kerui Building Technology with its own funds of 80.8 million yuan. Headquartered in Ningbo, Zhejiang, Zhejiang Kerui specializes in the customized development and service of residential comfortable home systems, and its products include nine product systems, including "first-class heating system", "air conditioning system", "heating and cooling heat pump system", "water treatment system", "fresh air system", etc., which can provide users with technology-leading, healthy and high-quality comfortable home system solutions. At present, Zhejiang Kerui has served more than 50,000 customers, and is one of the influential integrated service providers in the domestic comfortable home furnishing industry.
Based on the following assumptions, we expect the company's revenue from 2023 to 2025 to be 63100 million, 68600 million, 74200 million, -9 year-on-year3%、+8.8%、+8.1%, and the net profit attributable to the parent company was 14 each0.9 billion, 141.5 billion, 153.7 billion, year-on-year. 6% and EPS of 089 yuan shares, 089 yuan shares, 0$97 shares.
1) The demand for PPR pipes remained stable, the company's market share continued to increase slightly, and the profit fell slightly;
2) The demand for PE pipes is related to the investment in municipal infrastructure, and the company's engineering business strategy is stable, assuming that it will maintain a slight growth and stable profitability;
3) PVC pipes and PPR pipes are synergistic in some channels, assuming that the growth rate is similar to PPR, and the profitability will drop slightly;
4) The concentric circle business maintained rapid growth, the matching rate of waterproof and water purification continued to increase, and the profitability increased.
After the company implemented the star butler service in 2012, the profit center moved up significantly, and the ROE continued to improve, the valuation center in 2014-2016 was about 20x, after 2016, the star butler service was further upgraded and matured, and the improvement of the superimposed expense ratio made the company's net profit margin stand at more than 20%, ROE rose to more than 25%, and the valuation center moved up to about 25x. After 2020Q3, the impact of hardcover houses has weakened, and the alpha of the building materials industry has become more and more significant, and the valuation has risen to more than 25x again.
Benchmarking the real estate chain and some consumer goods leaders, combined with industry demand, business quality, growth, dividends and other factors, Weixing New Materials is given a valuation of 18 20x in 2024, with a target price of 162~18.$0 shares.
Macroeconomic growth is less than expected:Real estate investment is highly correlated with the macroeconomy, and the slower than expected macroeconomic growth may be transmitted to residents' confidence and willingness to buy houses;
Risk of a significant decline in real estate investment or infrastructure investment:The company's PPR pipes and fittings are mainly used in the field of home decoration, and PVC and PE pipes and fittings are also related to infrastructure and municipal, and the downturn in infrastructure or real estate investment affects downstream demand;
The rapid increase in the penetration rate of hardcover rooms has impacted the C-end marketThe company's channels are mainly retail channels, and if the proportion of fine decoration increases rapidly, it will lead to the concentration of industry traffic to B-end customers, which will have a certain impact on the C-end market in the short term;
Concentric circle business synergy is less than expected:Profitability** takes into account the contribution of concentric circle businesses such as waterproofing and water purification, and if the synergies are less than expected, revenue and performance growth may be affected.
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