Introduction to this report:
The company's short-term performance is under pressure, and the 2022Q4 gross margin is being dragged down. We look forward to the two-wheel drive expansion of the company's main home appliance business and new energy vehicles in 2023.
Key points of investment:
Investment advice: Q4's performance fell short of expectations, putting pressure on the company's performance. Considering that the recovery of gross margin in the main business and the pace of new business expansion is uncertain, we lowered the 2023-2024 earnings forecast and added a 25-year profit forecast. It is estimated that the 2023-2025 EPS will be 0.47/0.63/0.81 yuan (the original value for 2023-2024 was 0.52/0.77 yuan, a reduction of -10%/-18%), compared to +45%/+36%/+28%, with reference to comparable companies, giving the company 23 years 32xPE slightly lowered the target price to 14.9 yuan, maintaining the “increase in holdings” rating.
Performance fell short of expectations. Q4 was the main drag: the company achieved revenue of 789 million yuan in 2022, +4.18% year on year, net profit of 76 million yuan, +5.76% year on year, net profit of non-return mother of 42 million yuan, or -34.76% year on year; of these, 202Q4 achieved operating income of 196 million yuan, -3.67% year on year, and Guimo's net profit - 10 million yuan, year-on-year - 11 million yuan. The non-recurring profit and loss in 2022 mainly came from the one-time profit from the sale of the subsidiary, Zhuhai Huiying.
Category performance is divided, and overseas growth is superior to domestic growth: Judging from category performance, wind turbine growth is superior to filters, making it the largest category contributing to the company's revenue. Judging from regional performance, overseas growth is superior to domestic growth, and the share of overseas has further increased. In terms of new business development, the company's revenue in the field of clean appliances increased dramatically over the same period last year, and reached cooperation with some leading customers in the field of new energy vehicles.
Gross margin is under pressure, and the cash flow performance is good: gross margin in 2022 was 22.29%, -4.84pct compared to the previous year, and the 22Q4 gross margin was 11.38%. It is estimated that the reason is price decline, part of the cost was included in Q4 once, the pandemic shutdown, etc. It is expected that the impact on product prices will continue in 2023, and the impact of the pandemic on orders may be partially made up. The company's cash flow was relatively good, and operating cash flow increased significantly over the same period last year.
Risk warning: The pace of gross margin recovery and new business expansion is uncertain.