Event: on the evening of October 25, 2023, Asher disclosed that its total operating income was 69.526 billion yuan, an increase of 2.36% over the same period last year, and its net profit was 517 million yuan, down 18.09% from last year, with a basic EPS of 0.42 yuan.
2023Q3's revenue grew steadily compared with the same period last year, and its net profit reflected a little pressure. According to the company's third quarterly report, 2023Q3 achieved an operating income of 22.981 billion yuan, a steady increase of 4.97% over the 21.893 billion yuan of 2022Q3, while the company's 2023Q3 realized a net profit of 198 million yuan, down 11.34% from 2022Q3's 223 million yuan, and 36.88% from 2023Q2's 144 million yuan. The company's 2023Q3 gross margin level reached 3.46%, compared with 2023Q2's 2.73% month-on-month increase 0.73pcts, the gross margin level has rebounded.
The company has made remarkable achievements in overseas market development, and the layout of new retail business continues to evolve. The company is actively expanding overseas markets, with a substantial increase in overseas business in 2022, with overseas revenue of 5.757 billion yuan, + 71.11% compared with the same period last year.
At present, the company has obtained the exclusive license of Glory in many overseas countries and regions, and joined hands to achieve a new breakthrough in sales share and sales scale in Hong Kong, China. While helping other brands to sell overseas, the company actively builds its own brand's overseas outlet to lay the foundation for its own business going out to sea. The traditional retail model is based on offline physical store channels, relying solely on the surrounding people to sell goods, seriously limiting the scope of the audience and the inflow of new customers, unable to promote rapid consumption. After years of accumulation, the company has cut into the new field of e-commerce retail from single-line traditional channels, and has formed the brand operation and member operation capability of online full scene through digital tools such as platform e-commerce, live e-commerce, short video, social platform, etc. it can attract customers in the whole network, implement personalized push and service, and rely on warehousing and logistics networks to reduce costs and increase efficiency, and promote retail business upgrading.
The consumer electronics market is gradually recovering, and new product iterations are expected to drive the next round of growth. Affected by many factors, such as COVID-19 epidemic, industry cycle, broken supply chain and so on, the global consumer electronics market has remained weak since 2022.
Canalys data show that global smartphone shipments declined for the fifth consecutive quarter; 2023Q2 Chinese mainland smartphone shipments of 64.3 million units,-5% year-on-year, overall shipments are still declining, but the decline has gradually narrowed, the consumer market is facing signs of recovery. At the same time, with the increasing maturity of folding screen smart phone technology and the in-depth application of AI technology, consumer electronics companies will increase the layout of AI smart hardware, which may bring about a new round of consumer electronics terminal innovation and business model reform. We believe that with the gradual improvement of market sentiment and the iteration of superimposed new technologies, the global consumer electronics terminal consumer market is expected to usher in a recovery inflection point.
Investment suggestion: we expect the company's net profit from 2023 to 2025 to be 802 million yuan, 937 million yuan and 1.15 billion yuan respectively, and the current stock price corresponding to PE is 12x, 10x and 8x respectively. We expect that with the recovery of the mobile phone consumer market, the recovery of the company's mobile phone sales business will drive the company's overall revenue growth. at the same time, as a leading company in the field of communications and e-commerce, the company will actively promote new retail strategies, broaden sales channels and open up new markets. follow-up with strong growth, optimistic about the company's follow-up development, maintain the "recommended" rating.
Risk hint: the recovery of consumer electronics market demand is not as expected; the company's new business expansion is not as expected.