Since its listing, Boss Electric’s profits have grown rapidly, its share price has also increased by more than ten times, and the market has given high valuations. As the saying goes, the greater the expectation, the greater the disappointment. In 2018, Boss Electric’s revenue and net profit fell into a stagnant state, and the stock price was immediately cut in half, that is, Davis double kills.
When the stock price rises, what people see All are bad, and looking at the future is a risk.
When Boss Electronics is no longer the star that attracts much attention, perhaps it is the best time to study, because there is not much expectation, and a slightly better performance is beyond expectations.
The main products of Boss Electric are range hoods and gas stoves. The company has achieved the first domestic sales of range hoods in 22 years and the world's first sales for five consecutive years. It is a well-deserved leader in kitchen appliances.
In the field of kitchen appliances, the boss and Fangtai occupy the high-end market, Vantage and Midea occupy the mid-end market, and other brands occupy the low-end market. market.
Search for range hoods on JD. After a simple glance, you can find that the price of Boss’ appliances is much higher than that of brands such as Vantage and Midea. It is not at the same level. Why is this happening? Range hoods are not too difficult technology. Why doesn't Midea not make high-end products?
Actually, it's not that Midea and Vantage don't want to sell high-end range hoods, but if they raise the price to the boss, the customers will all go to buy the boss. Just like BMW and Great Wall at the same price, even if all configurations are the same, we will only choose BMW; the same is true for liquor, Moutai dares to sell more than 1,000, and others can only sell for a few hundred yuan. It's not that I don't want to, but I can't.
Once you buy a range hood, you have to accompany it for many years. Consumers do not have the professional ability to identify which one is more durable, cannot judge good or bad, and can only trust the brand.
In the minds of consumers, Boss Appliances is already synonymous with high-end range hoods, which is the deepest moat.
2. Space for growth.
Real estate regulation, the purchase of new houses has decreased, and many families have range hoods. Is there still room for the boss's electrical appliances to grow?
First of all, from a policy perspective, the state encourages the delivery of complete decoration of newly built residential buildings, and it is clearly stated that by 2020, the area of newly-built fully furnished residential buildings will reach 30%. In well-decorated houses, range hoods and gas stoves are almost standard.
And real estate developers also tend to cooperate with high-end kitchen appliances such as the boss Fang Tai, because of the big name, even if the model actually installed is not the best.
When I renovated the house last year, I was looking for a well-known decoration company to provide a full package. The package that the other party gave me included a lot of brands, such as the hood for the boss, and the floor. It's from a well-known brand.
It can be seen that more and more refined decorations are good for brand kitchen appliances.
Secondly, consumption upgrade is a major trend. Now in third- and fourth-tier cities, many kitchens use old-fashioned range hoods. If you want to change the machine, most of them will choose the brand hood, after all, a range hood will be used for many years.
3. Financial report.
Boss Electric is a company that is not bad for money. It has no long-term and short-term loans and has a lot of cash. In the 2019 annual report, Boss Electric’s current assets are 9.052 billion, of which 5.414 billion are cash and bank financing.
What makes me shine is that there are a lot of notes payable, accounts payable and advance receipts.
There are many bills payable and accounts payable, which means getting goods from upstream suppliers first and paying later; while there are many accounts payable in advance,Downstream distributors pay first, and then get the goods. These two indicators mean that the boss's electrical appliances are very competitive, and upstream and downstream must please it.
Actually, the boss’s financial report has nothing to say, it’s very clean.
Judging from the trend chart, Boss Electric may start a new upward trend. Regardless of whether the breakthrough is successful or not, it will be one of the companies I have been following for a long time.
Taking advantage of the market volatility, I will also analyze more promising companies, especially those that are defensive. But being optimistic is just subjective, no matter how many times you have been right, there will eventually be times when you are wrong. I hope that everyone will have the mentality of choosing the strong and eliminating the weak. Falling is not an opportunity for bargaining. It is also likely that I have misunderstood it; if it rises, there is no fear of heights.
The above is just a bit of my personal opinion, I hope it will be helpful to you.
See you tomorrow~