The hottest OPP lighting leader enjoys the dividen

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Opp lighting: the lighting leader has developed steadily and enjoyed the dividend of concentration improvement

OPP lighting (603515)

Event: Recently, we] conducted research on the company

Technology: with the technological change of lighting industry, the company's transformation takes the lead. With the steady improvement of key technologies in the semiconductor lighting industry, the accelerated process of innovation and application, the continuous improvement of the industry standard system, and the support and promotion of the national policy support Troika for various uses, incandescent lamps are gradually phased out, and LED has become the mainstream light source of lighting. In 2014, the company took the lead in completing the transformation from traditional lighting to LED lighting, and has become a leader in the LED general lighting industry

Market: potential and opportunities coexist, and the leading expansion is expected in the future. CSA pointed out that in 2017, the market size of the middle and downstream application end of China's LED industry chain accounted for about 82%, and the general lighting field of OPP accounted for nearly 47% of the downstream application end of LED, amounting to 255.1 billion yuan. At present, the general lighting industry cr510%, I believe that OPP lighting can seize a larger market share under the trend of increasing industry concentration

products: the improvement of structure and the provision of anti insurance can hope that the majority of employees can work actively, and the expansion of categories can promote profit growth. 1) Home lighting: diversified in style, including Western retro, new Asian fashion, modern simplicity and other series. The New Nordic minimalist is still undergoing stability tests because of the innovative module assembly mass production method, so as to avoid the face brick falling off and hurting people. This year, the number of terminal merchants is lower than expected, and it is expected to improve the company's gross profit level after mass production. 2) Commercial lighting: the company has cooperated with Haier, Vanke and other companies and local governments to create high-quality projects such as Tianjin night scene improvement of the 13th National Games, which has enhanced the brand strength of the company. 3) Non lighting products: non lighting business can play a guiding role in lighting business. Under the guidance of the full decoration policy, the newly launched integrated decoration business in 2017 is expected to bring new profit growth points to the company, and electrical products have a positive role in improving the overall gross profit of the company

channels: multi-channel upgrading and expansion, incremental quality improvement, and the right remedy. 1) Retail channels: different kinds of stores in professional channels operate different kinds of products, emphasizing standardized operation. Qianping store, which is used to improve user experience, is the focus of expansion this year; The county and town channels promote the transformation from business to business, and improve the dealers' ability to actively obtain customers. 2) Circulation channels: mainly rely on hardware stores, stationery stores, grocery stores and other sales company products, the main categories are led bulb lamps, light tubes, light belts, downlights and hardware electricians. In the future, the company will increase the laying density of distribution channels, reduce the production cost of basic products and launch new products with high gross profit. The overall operating capacity of the company is the strongest in the industry

profit forecast and investment suggestions. It is estimated that the annual EPS of the company will be 1.16 yuan, 1.40 yuan and 1.67 yuan respectively, and the net profit attributable to the parent company will maintain a compound growth rate of 22.8% in the next three years. Coverage for the first time, and give an overweight rating

risk tips: raw material prices fluctuate sharply, real estate fluctuates sharply, and new products do not meet the expected risk

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