Event: The company released its three-quarter report. 23Q1-Q3 achieved operating income of 2.55 billion yuan, a year-on-year increase of 2.3%; realized net profit of 170 million yuan, a 1.0% increase, a net profit margin of 6.5%, a decrease of -0.1 pct; realized net profit of 110 million yuan, a year-on-year increase of 13.9%, and a net profit margin of 4.3%, an increase of 0.4 pct. Looking at a single quarter, 23Q3 achieved operating income of 1.04 billion yuan, a decrease of 1.6%; realized net profit of 0.9 billion yuan, same increase of 24.8%, net profit margin of 8.6%, same increase of 1.8 pct; realized net profit deduction of 0.7 billion yuan, year-on-year increase of 20.2%, net profit margin of 6.4%, same increase of 1.2 pct.
The consolidated gross margin of 23Q1-Q3 company was 28.9%, an increase of 0.4 pct. The fee rate for the period was 23.2%, minus 0.2 pct. Among them, the sales/management/R&D/finance expense ratio was 12.9%/5.0%/5.6%/-0.2%, respectively, with a year-on-year change of -0.1 pct/+0.03 pct/+0.1 pct/-0.2 pct. Looking at a single quarter, the 23Q3 consolidated gross margin was 29.8%, a year-on-year increase of 1.9pct. The fee rate for the period was 21.5%, an increase of 0.3 pct. Among them, the sales/management/R&D/finance expense ratio was 12.1%/4.2%/5.3%/-0.1%, respectively, with a year-on-year change of -0.3 pct/+0.2 pct/+0.9 pct/-0.4 pct.
By product, the 23Q1-Q3 overall kitchen cabinet/overall wardrobe/ wooden door products achieved operating income of 15.7/73/160 million yuan respectively, a year-on-year change of -5.5%/+11.3%/+53.4%, and gross margin of 29.0%/29.4%/4.6%, respectively, and a year-on-year change of +0.5pct/+2.2pct/-1.1 pct.
Looking at each channel, 23Q1-Q3 distributors/direct-run stores/bulk business/overseas achieved operating income of 13.3/0.7/8.7/2.0 billion yuan, a year-on-year change of +5.4%/-28.9%/-3.7%/+19.5%, gross margin of 36.1%/56.8%/13.1%/24.3%, year-on-year change of +2.1pct/-11.8pct/-1.2pct/+1.1pct.
As of the end of September '23, the company had 1831/1192/666/151/96/140 gold-medal kitchen cabinet/gold-medal wooden doors/gold-medal wooden doors/decoration hall/balcony bathroom/Manio stores, respectively.
Profit forecast and rating: In view of weak demand, we lowered the company's net profit for the year 23 and 24 from 32/390 million yuan to 30/350 million yuan, a year-on-year change of 6.2%/19.1%. The current stock price corresponding to 23/24 PE is 14.11/11.85 times, and PB is 1.44/1.28 times, respectively. The reference comparable company gave a PE valuation of 17-19 times in '23. The corresponding reasonable value range was 32.43-36.24 yuan, and the corresponding PB for 2023 was 1.73-1.94 times, giving it a “superior to the market” rating.
Risk warning: Real estate sales area declined, channel category expansion fell short of expectations, and raw material prices continued to rise.