Core views:
The company released its 2023 mid-year report, and the Q2 performance growth rate rebounded. 23H1's revenue was 450 million yuan (YoY -1.0%); net profit from Gimo was 110 million yuan (YoY +9.7%). 23Q2's quarterly revenue was 280 million yuan (YoY +4.5%); net profit from Gimo was 0.7 billion yuan (YoY +11.6%).
The 23H1 integrated stove industry was under pressure as a whole, and retail sales fell 1.3%. With the gradual implementation of the “Secure Your House” policy, overall demand for kitchen appliances has rebounded. According to Aowei data, offline retail sales of 23H1 range hoods and gas stoves increased by 7.6% and 2.2% over the same period in '22. Demand for integrated stoves was weaker than the industry as a whole. The retail sales of 23H1 integrated stoves were 12.4 billion yuan, down 0.4% year on year; retail sales volume was 1.43 million units, down 1.3% year on year (summary data from Aowei Cloud Network (AVC)).
Revenue resumed growth in 23Q2, and the company's online share remained fourth. 23Q2 The company's revenue increased by 4.5%, mainly due to the rapid expansion of the company's channels and the accelerated deployment of new online marketing channels. It already has about 1,300 offline dealers and 2,200 sales terminals. According to Aowei Cloud Network monitoring data, 23H1 Shuaifeng's online retail sales share reached 7.9% (YOY+0.2pct), ranking fourth; offline retail sales share reached 0.3% (YOY-0.2pct). In '23 and 618, the company's TJ3-8B steaming and grilling synchronous integrated stove won the top single product sales in the simultaneous steaming and roasting category on the Tmall and JD platforms.
23Q2 Raw material costs fell and the company's profitability improved. 23Q2 The company's gross margin increased to 48.0% (YOY+1.8pct), mainly due to lower raw material costs. In terms of cost ratio, the sales expense ratio increased. The 2023Q2 sales/management/ financial/ R&D expenses ratio was 14.0%/3.8%/-3.1%/3.6%, respectively, compared with the previous year, +3.0 pct/-2.3 pct/-0.2 pct/-1.3 pct, and the return to home net interest rate of 26.4% (YOY+1.7 pct).
Profit forecast and investment suggestions: The company's net profit is expected to be 2.4, 2.6 billion yuan, and 290 million yuan respectively in 2023-25, with year-on-year growth rates of 12.2%, 9.8%, and 9.6%, respectively. The latest closing price corresponds to the 2023 PE of 12.10x. Taking into account the valuation and performance growth rate of comparable companies, PE15x was given in 2023, with a corresponding reasonable value of 19.61 yuan/share, maintaining the “increase in holdings” rating.
Risk warning: raw material prices are rising; exchange rates fluctuate greatly; industry demand weakens.