Investment events
Boss Electric disclosed the 2023 three-quarter report. In 2023, Q1-Q3 achieved revenue of 7.93 billion yuan (+9.6% yoy), net profit of 1.37 billion yuan (+11.3% yoy), net profit of 1.37 billion yuan (+11.3% yoy), net profit after deducting non-refunded net profit of 1.28 billion yuan (+13.3% yoy). In Q3 alone, the company achieved revenue of 3.0 billion yuan (+7.4% yoy), net profit of 540 million yuan (+6.5% yoy), net profit of 540 million yuan (+8.1% yoy) after deduction of net profit of 540 million yuan (+8.1% yoy). The company's performance fell slightly short of our expectations.
Key points of investment
Revenue performance is steady. The retail and e-commerce channels are expected to perform well, and 23Q3's revenue is +7.4% year-on-year. We expect retail and e-commerce channels to perform well, and engineering channels may be under pressure.
The real estate completed area from January to September 2023 was +20.1% year-on-year, and continued to grow rapidly. Moreover, the company grasped Tier 1 and 2 renewal and replacement needs, and revenue is expected to maintain steady growth.
Raw material cost dividends have weakened, and profitability has stabilized
23Q3 The raw material cost dividend weakened, and the company's gross margin was 52.2%, which is basically the same as the same period last year. The company's sales expense rate/management expense rate/R&D expense rate/financial expense ratio was -0.2 pct/+0.1 pct/+0.2 pct/+1.0 pct, respectively.
Under the overall influence, the company's net profit margin was 18.1%, -0.1pct year on year. Performance was stable, and net profit was +6.5% year-on-year.
Profit forecasting and valuation
The company's traditional category management is steady, and emerging categories are growing rapidly. We expect the company's net profit from 2023-2025 to be 1,803 billion yuan, 2,050 billion yuan, and 2,321 billion yuan respectively, compared with +14.65%, +13.70%, and +13.24%, respectively, corresponding to the current stock price PE of 12x/11x/9x, maintaining the “buy” rating.
Risk warning: Real estate continues to decline; raw material prices have risen sharply.