Incidents:
On October 26, Mousse Co., Ltd. announced the results announcement for the third quarter of 2023:2023Q1-3, the company achieved operating income of 3.805 billion yuan/year on year -8.4%, net profit of 518 million yuan/year on year +21.4%, net profit after deduction of 502 million yuan/year on year +20.8%. In 2023Q3, the company achieved operating income of 1,406 million yuan/year on year +0.33%, net profit of 163 million yuan/year on year +37.4%, net profit of 156 million yuan/year on year after deducting net profit of 156 million yuan/year on year +47.0%.
Key points of investment:
Q3 The year-on-year revenue growth rate was corrected, and the operating capacity was steady. In 2023, the company terminated the European direct supply business, and revenue was under phased pressure. The company has established a diversified sales network system covering the whole country. The product matrix has been gradually enriched to strengthen customer base coverage, integrated methods of play to increase customer orders, diversified e-commerce platforms have expanded, and the company's Q3 revenue has resumed growth.
Product structure optimization is superimposed on SKU streamlining, and profitability indicators are improving. 2023Q1-3, gross profit margin 50.79%, year-on-year +4.32 pct, of which Q3 gross profit margin was 50.98%, year-on-year +3.70 pct.
Thanks to the reduction in the direct supply business to Europe with low gross profit, product structure optimization, and the continuous streamlining of inefficient products, the company's gross margin continues to increase.
The expense ratio was relatively stable during the period, and sales investment increased. The 2023Q1-3 company's period expense ratio was 34.46% /year over year +1.01 pct, of which the sales/management/R&D/financial expense ratio was 26.25%/5.84%/3.54%/-1.17%, respectively, +0.95/+0.95/-1.02pct; Q3, the company's period expense rate for a single quarter was 38.54% /year over +1.29 pct, of which sales/management/R&D/finance expenses were 29.47%/6.11%/4.31%/-1.35%, respectively. YoY +0.26/+0.17/+1.69/-0.82 pct The company's marketing empowerment investment has increased, R&D efforts for new V6 products have been increased, and sales and R&D expenses have been raised.
Profit forecast and investment rating: The company focuses on the “integrated” business development of high-end sleep products, actively develops the “two wings” of sofas and V6 residential homes, and cultivates continuous development momentum. Since the company's operations are affected to a certain extent by the real estate environment, we expect the company to achieve operating income of 60.28/69.65/8.041 billion yuan and net profit of 8.16/9.34/1,064 billion yuan in 2023-2025, corresponding valuation of 17/14/13 x PE. Maintain the company's “increase in holdings” rating.
Risk warning: Real estate recovery falls short of expectations, terminal consumption power recovery falls short of expectations, market competition intensifies, business reforms fall short of expectations, and macroeconomic fluctuations.