23Q3 revenue decreased by 1.6%, net profit increased by 24.8%
23Q1-3 revenue was $2.55 billion, a year-on-year increase of 2.3%. 23Q1, Q2, and Q3 revenue and year-on-year growth rates were 570 million (+1.1% yoy), 930 million (+8% yoy), and 1.04 billion (-1.6% yoy); by category, 23Q1-3 cabinet revenue was 1.57 billion, down 5.54%; wardrobe revenue was 730 million, up 11.29%; wooden door revenue was 160 million, up 53.38%.
By channel, revenue from 23Q1-3 dealerships was $1.33 billion, up 5.44%; direct-run stores were $67 million, down 28.87%; bulk: $870 million, down 3.72%; and overseas, $200 million, up 19.47%.
The net profit of 23Q1-3 was 170 million yuan, an increase of 1%. In 23Q1, Q2, and Q3, net profit and year-on-year growth rates were 0.3 billion (+8.2% yoy), 0.4 billion (-29.9% yoy), and 0.9 billion (+24.8% yoy), respectively; the increase in Q3 net profit was mainly due to supply chain optimization. The procurement price of raw materials decreased compared to the same period last year. At the same time, the company focused on technological innovation and development strategies to build the core intelligence of digital research, production, supply and marketing, and strived to improve the company's level of intelligent and flexible manufacturing. The results of cost reduction and efficiency measures are increasingly being realized.
23Q1-3 deducted non-return net profit of 110 million dollars, an increase of 13.9%; 23Q1, Q2, and Q3 net profit and year-on-year growth rates were 0.1 billion (-2.9% yoy), 0.3 billion (+9.5% yoy), and 0.7 billion (+20.2% yoy), respectively;
The gross profit margin of 23Q1-3 increased by 28.9% by 0.4pct, the net profit margin of 6.4% decreased by 0.1pct by category; the gross profit margin of the 23Q1-3 cabinet was 29%, the same increase of 0.46pct; the gross profit margin of the wardrobe was 29.37%, the same increase was 2.2 pct; the wooden door was 4.62%, the same decrease was 1.13pct.
By channel, the gross profit margin of 23Q1-3 distribution was 36.07%, same increase of 2.13pct; direct sales of 56.83%, same decrease of 11.75pct, mainly due to the conversion of some direct-run stores into dealerships and sales showroom samples in the early stages; the bulk was 13.1%, same decrease of 1.22pct; overseas gross profit margin was 24.3%, same increase of 1.13pct.
23Q1-3 sales expense ratio is 12.85%, same decrease 0.11pct; management expense ratio (including R&D expenses rate) is 10.51%, same increase 0.1 pct; financial expense ratio is -0.18%, same decrease 0.24 pct.
As of 23Q3, the number of stores added by each brand compared to the end of '22 was 1,831 gold medal cabinets (net increase of 39), 1192 gold medal wardrobes (net increase of 101), 666 gold medal wooden doors (net increase of 105), 151 decoration halls (net increase of 60), 96 balcony bathrooms (net increase of 22), and 140 Manio stores (net increase of 20).
Increase investment in channel construction to empower marketing network layout
The company vigorously promotes the construction of platform branches and offices, promotes the “cloud, management, edge, and end” channel structure, accelerates channel transformation and sinking, and lays an important foundation for channel layout in terms of organizational structure; the company continues to improve its infrastructure capabilities, and has built digital tools that fully empower dealers, such as intelligent design (collov), smart marketing (gold store growth), dealer empowerment management (management), logistics and warehousing systems directly from dealers to end users (dry warehouse distribution), and installation team platforms that empower dealers (Jin Gongfu), etc., are being further improved. viscous At the same time, lower the investment threshold and enhance the implementation and execution of the company's declining channels.
Adjust profit forecasts to maintain “buy” ratings
The company specializes in R&D, design, production, sales, installation and after-sales services for overall kitchen cabinets and customized homes. The company adheres to the path of branded development, always based on consumer needs, continuously pursues excellent quality, builds a R&D center integrating R&D, production, supply and marketing, establishes a complete three-level R&D system, and stepped up efforts to promote channel transformation and sink implementation of the “service+product” one-stop worry-free service model to create a better reputation for gold medal users and brand reputation. Considering that market consumption is under slight pressure, we lowered our expectations for subsequent demand slightly, so we adjusted our profit forecast. The net profit of 23-25 companies is estimated to be 3.09/3.61/416 million yuan (previous value is 3.09/3.99/426 million yuan), EPS is 2.00/2.34/2.70 yuan/share, and PE is 13/11/10x respectively.
Risk warning: risk of increased market competition; risk of raw material price fluctuations; risk of dealer sales model, etc.