Event: Jiangshan European Group released its third quarter report in 2023. 2023Q1-3 achieved an operating income of 2.705 billion yuan, an increase of 22.22% over the same period last year, a net profit of 291 million yuan, an increase of 842.52% over the same period last year, and a net profit of 253 million yuan to turn losses into profits. Among them, 2023Q3 achieved an operating income of 1.103 billion yuan, an increase of 17.06% over the same period last year; a net profit of 149 million yuan to turn losses into profits; and a net profit of 139 million yuan to turn losses into profits.
The growth rate of the bulk channel is remarkable, and the dealer channel is opened up steadily.
From a sub-channel point of view, 23Q1-3 company's distribution channel, engineering channel and agent channel achieved income of 7.30,9.06 and 855 million yuan respectively, which was + 19.58%, + 11.13% and + 54.01% compared with the same period last year. 1) in terms of dealer channels, by the end of September 2023, the company had 33299 dealers nationwide, a net increase of 8695 over the end of 22, the company cancelled the exclusive agency model for dealers, implemented the business model of simultaneous development of all kinds of dealers, increased market share, vigorously expanded full-product dealers, and achieved steady growth in 23Q1-3 channel revenue. 2) in terms of engineering agent channels, the guaranteed delivery policy continued to land, the real estate completion data improved, and the company actively adjusted the structural effect of engineering customers. 23Q1-3 achieved a total revenue of 1.838 billion yuan in bulk channels, an increase of 28.15% over the same period last year. In terms of products, 23Q1-3 plywood molded doors, solid wood composite doors and cabinets achieved business income of 16.11 million yuan, respectively, with a year-on-year increase of + 19.88%, 24.54% and 37.28% respectively.
23Q3 gross profit margin has improved, and cost control has led to a significant increase in net profit margin in the first three quarters of 2023 to 24.83%, a year-on-year decline in 1.59pct, of which 23Q3's comprehensive gross margin was 26.76%, an increase of 3.38pct over the same period last year. The decline in 23Q1-3 gross profit margin is mainly due to the decline in bulk gross profit margin. In terms of period expenses, in the first three quarters of 2023, the company's period expense rate was 13.03%, a year-on-year decrease of 4.51pct, and the sales / management / R & D / financial expense rates were 6.83%, 2.31%, 3.53%, 0.35%, respectively, compared with the same period last year. Under the combined influence, the net interest rate of the company in the first three quarters of 23 was 10.65%, an increase of 9.51% over the same period last year. The net interest rate of 23Q3 company was 13.59%, an increase of 22.95pct over the same period last year, mainly due to a large impairment loss in the same period last year.
In terms of cash flow, the net cash flow of operating activities in the first three quarters of 23 was 316 million yuan, an increase of 16.66% over the same period last year, mainly due to the optimization of sales structure and the growth of payment business.
Investment suggestion: Jiangshan Europe Group is the subdivision leader of the domestic wooden door industry, the production capacity advantage is constantly consolidated, the effect of the new retail channel reform is gradually obvious, and the engineering channel is expected to continue to benefit from the continuous promotion of the Baojiao building. We expect the operating income of Jiangshan Europe Group to be 40.32,50.05 and 6.007 billion yuan in 2023-2025, an increase of 25.65%, 24.14% and 20.02% over the same period last year. The net profit of homing is 4.15,5.43 and 669 million yuan, an increase of 238.88%, 30.93% and 23.19% over the same period last year, corresponding to PE 14.1x, 10.8x and 8.8x, with a 24-year 15.6xPE and a target price of 47.64yuan, maintaining the investment rating of Buy-A.
Risk hint: the fluctuation risk of the real estate industry; the market competition aggravates the risk; the channel expansion falls short of the expected risk.