Supor: Initiating China’s Top Kitchen Appliance Company With a Narrow Moat; Shares Fairly Priced

We initiate coverage on China’s leading kitchen appliance and cookware manufacturer Supor, with a CNY 51 fair value estimate, narrow moat rating, Medium Morningstar Uncertainty Rating, and Standard Morningstar Capital Allocation Rating. Supor has retained sector leadership over the past decade thanks to its robust product quality and wide sales network in China. Despite maturing demand in China, we expect Supor to remain the top kitchen electronics and cookware brand, leading to a 4.9% domestic revenue compound annual growth rate for 2023-28. Outside of China, Supor generates most of its revenue from selling original-equipment-manufacturer products to parent Groupe SEB. We foresee a stronger 10.2% five-year revenue CAGR overseas for Supor as its products gain more traction. We also model an operating margin uptick to 12.6% in 2028 from 11.6% in 2023 amid product mix upgrades and cost optimization. That said, we think the positives have been largely reflected in Supor’s current share price.