Revenue remained stable in 2022, and SharkNinja's market competitiveness was stable. Maintaining the “buy” rating, the company achieved revenue of US$5.04 billion (-2.12%) in 2022, revenue was +0.6% year on year under a fixed exchange rate, and achieved net profit of US$330 million (-20.1%). 2022H2 achieved revenue of US$2,232 million (-0.32%), revenue was +0.55% year-on-year under a fixed exchange rate, and achieved net profit of US$164 million (-15.26%). Due to short-term pressure on the company's performance due to exchange rate fluctuations, costs and fee increases, we lowered our 2022-2024 earnings forecast. We expect net profit of US$332/396/446 million for 2022-2024 (the original value of 2022-2024 was US$497/5.62/637 million US dollars), the corresponding EPS was 0.10/0.11/0.13, and the current stock price corresponding to PE is 10.1/8.6/7.6 times. Looking ahead, considering the expansion of new products/new markets, SharkNinja's competitiveness in overseas markets is stable. If the spin-off and equity processing are handled smoothly, the value is expected to be re-evaluated and the “buy” rating will be maintained.

The SN segment maintained steady growth under the expansion of new products and channels, and the overseas market share of the three categories increased steadily (1) By brand, Shark/Ninja/ Joyang brand revenue in 2022 was +2.17%/-3.19%/-6.93% year over year, and 2022H2 was +2.11%/-2.3%/-13.26% year over year. Shark's brand grew slightly, and the Joyang brand declined due to exchange rate fluctuations and factors such as the epidemic. (2) By category, cooking/food/cooking/cleaning appliances/other revenue in 2022 was -5.68%/-3.14%/-1.14%/+18.91%, with new products such as hair dryers and air purifiers driving the growth of other products. The market share of cleaning appliances in the US/UK increased by 2.6 pcts/1.2 pcts respectively. The decline in the US market share of cooking appliances was mainly impacted by the removal of inventory at low prices, and the market share of food cooking appliances in the US/UK increased by 2.7 pcts/4.4 pcts respectively.

The Joyang division benefited from structural optimization and a year-on-year increase in gross margin. The increase in overall expense ratios disrupted the company's gross profit performance of 37.30% (-0.1pct) in 2022. The gross margin of the Joyang/SN segment was +1.55pct/-0.83pct, respectively, and Joyang benefited from product structure optimization. In 2022, the company's sales/management/finance expense ratio was -0.02 pcts/+1.66 pcts/+0.4 pcts, respectively. The increase in the management expense ratio increased the number of main staff, and the increase in the financial expense ratio led to an increase in interest rates. Under the combined influence, the company's net interest rate in 2022 was 7.09% (-1.07pcts).

Risk warning: the spin-off plan fell short of expectations; raw material prices rose; industry competition intensified, etc.