Under pressure from the industry, the company's revenue was relatively stable, and profits declined somewhat. The company achieved revenue of US$5.04 billion/-2.1% in 2022, an increase of 0.7% at a fixed exchange rate; achieved net profit of US$330 million/ -21.0%.

After conversion, the company's 2022 H2 revenue was $28.1 billion/ -3.5%, and the net profit was $170 million/ -25.9%.

Considering that the company is currently spinning off SharkNinja and listing in the US, the company will not pay dividends. Affected by high inflation in Europe and the US, sales in the small home appliance industry are under pressure, but the company's overall revenue performance is still steady. Affected by rising financing costs and increased personnel expenses, the company's profits are under some pressure.

SharkNinja bucked the trend and performed beautifully, and the Joyang division was dragged down a bit. In 2022, the company's SharkNinja revenue was $3.72 billion, the same as the previous year. Among them, H2 has resumed positive growth, up 0.2% year over year. SN's market share in the US and UK markets continued to increase. In the US market, the market share of food cooking appliances reached 36.1% /+2.7pct, the market share of cleaning appliances was 34.6% /+2.6pct, and the market share of cooking appliances was 26.2% /-1.2pct; in the UK market, the market share of vacuum cleaners was 31.8% /+1.2pct, and the market share of food cooking appliances was 16.9% /+4.4pct. The revenue of the Joyang division fell 7.7% to $1.33 billion in 2022.

By region: H2 Europe's revenue performance is improving. The company's revenue in North America fell 1.2% to $2.93 billion in 2022, of which H2 fell 1.7%; China's revenue fell 6.5% to $1.31 billion, of which H2 fell 11.3%; European revenue increased 2.5% to $630,000, of which H2 increased 9.2%; revenue from other regions increased 1.2% to $170 million, of which H2 fell 18.0%. Driven by the continued increase in the UK's share and strong revenue growth in newly developed countries, the company's revenue performance in the European region was good.

By product: New categories are growing faster. The company's cleaning appliance revenue fell 1.1% to US$1.94 billion in 2022, of which H2 fell 3.0%; cooking appliance revenue fell 5.7% to US$1.76 billion, of which H2 fell 8.2%; food cooking appliances revenue fell 3.1% to US$1.01 billion, of which H2 fell 3.6%; revenue from other products increased 18.9% to US$330 million, of which H2 increased by 22.1%. The company's new categories, such as hair dryers and air purifiers, are growing strongly, and the expansion of categories continues to inject momentum into the company's growth.

Cost-side adverse factors have improved, and H2 gross margin has improved positively. The company's gross margin in 2022 was 37.3% /-0.1pct, of which H2 was 36.2% /+1.3pct. The slight decline in gross margin throughout the year was mainly affected by the higher cost of shipping containers and raw materials, and promotional investment also increased; 2022H2 raw materials and shipping have shown positive improvements, driving the company's gross margin increase, and it is expected that future gross margin will continue to improve. On the cost side, under the company's personnel expansion, the management fee rate was +1.7 pct, and the interest rate increase led to the financing fee rate +0.4 pct. The annual net interest rate to the mother was 6.6% /-1.6pct, of which the H2 net interest rate to the mother was 6.0% /-1.8 pct.

Risk warning: shipping fell short of expectations; overseas demand worsened; raw material prices fluctuated greatly.

Investment advice: Adjust profit forecasts to maintain a “buy” rating.

Taking into account changes in overseas demand and the pace of interest rate increases, the profit forecast is estimated to be 41/48/5.2 billion US dollars (previous value was 4.5/51/100 million US dollars) for 2023-2025, +22%/+18%/+9% compared to the same period; diluted EPS = 0.12/0.14/0.15 US dollars, corresponding PE = 9/7/7 times, maintaining the “buy” rating.