Event: Shuaifeng Electric Appliance publishes its annual report of 2022 and quarterly report of 2023. The income of the company is 950 million yuan in 2022, and the net profit of YoY-3.2%; is 210 million yuan, YoY-13.1%.

Converted to 2022Q4 single quarter, the company realized income of 240 million yuan, YoY-18.5%; realized net profit of 60 million yuan, YoY-0.3%. Shuaifeng 2023Q1 realized income of 180 million yuan, YoY-8.5%; realized net profit of 40 million yuan, YoY+6.3%.

Q1 revenue has declined: we believe that Shuaifeng 2023Q1 revenue has declined due to fluctuations in third-and fourth-tier real estate sales. From the market share of sales, according to industry online, 2023Q1 Shuaifeng integrated cooker sales market share of about 9.6%, year-on-year + 0.2pct, the industry status has been improved. We expect that with the recovery of terminal consumption, the company is expected to improve.

Q1 net interest rate increased significantly: according to the announcement, Shuaifeng 2023Q1 net profit rate is 22.9%, year-on-year + 3.2pct, mainly due to the decline in raw material prices, Q1 gross profit margin year-on-year + 3.4pct. Looking ahead for the next few quarters, we expect profitability to continue to improve as the company launches more high-end new products.

Shuaifeng optimize and adjust channels: according to the announcement, offline distribution channels, Shuaifeng increased and optimized about 200 dealers in 2022, and the number of dealers at the end of the year was nearly 1300; in terms of home improvement channels, the company assisted dealers to expand home improvement companies, by the end of 2022, the company already has more than 1000 local home improvement cooperation outlets; in terms of sinking channels, the company actively cooperated with Tmall excellent products and settled in sunken shops. We believe that Shuaifeng implements a positive channel policy to seize the market, and its future development is expected.

Investment suggestion: Shuaifeng Electric Appliance is a domestic integrated stove advantage brand, the product structure is gradually optimized, the company is also expanding new categories. We estimate that the EPS of Shuaifeng in 2023-2024 is 1.40 yuan, 1.63 yuan, and the target price for 6 months is 21.00 yuan, corresponding to 15 times PE in 2023, maintaining the buy-An investment rating.

Risk hint: the price of raw materials has risen sharply, and the competition pattern has deteriorated.