The company released its three-quarter report for 2023:2023Q1-3 achieved operating income of 3.805 billion yuan, a year-on-year decrease of 8.38%; realized net profit of 518 million yuan, an increase of 21.44% over the previous year; and realized net profit after deduction of 502 million yuan, an increase of 20.77% over the previous year. 2023Q3 achieved operating income of 1,406 billion yuan, an increase of 0.33% over the previous year; realized net profit of 163 million yuan, an increase of 37.43% over the previous year; and realized net profit of 156 million yuan after deducting non-return to the mother, an increase of 46.98% over the previous year.
The year-on-year growth rate of 2023Q3 revenue in a single quarter was corrected, and measures related to maintaining growth in the second half of the year achieved remarkable results.
2023Q3 achieved revenue of 1,406 billion yuan, a year-on-year increase of 0.33%, and the year-on-year revenue growth rate for a single quarter was corrected (-23.10%/-4.32% in 2023Q1/Q2, respectively). We believe that the company's measures to maintain growth in the second half of the year have achieved remarkable results, mainly due to the fact that the classic division of the main brand of Mousse Health Sleep actively promoted a series of high-energy active marketing activities, including the Hundred Day Battle from July 8 to October 15, Double 11, and Double 12. At the same time, the company focused on improving marketing strategies and strengthening team training. In addition, the investment of resources for related active marketing activities was increased, empowering channels, and laying the foundation for maintaining growth; at the same time, the V6 community has also begun to gain strength, carry out active marketing through offline multi-level linkage, and promote active marketing through various types of voice. Adopt a variety of methods to improve sales performance through a variety of measures to promote better sales performance.
Profitability improved significantly, mainly due to an increase in gross margin. The net profit margin of 2023Q3 was 11.57%, an increase of 3.12pct over the previous year; it achieved a gross profit margin of 50.98%, an increase of 3.70pct over the previous year. In terms of cost ratio, sales expense ratio, R&D expense ratio, and financial expense ratio of 2023Q3 company were 29.47%, 6.11%, 4.31%, and -1.35%, respectively, +0.26pct, +0.17pct, +1.69pct, and -0.82pct, respectively. We believe that the significant improvement in the company's profitability has benefited from the company's lean production and refined management. Profits are sought from management through operating budget+assessment. Methodologically, through continuous upgrading of digital construction, we help reduce costs and increase efficiency, thereby standardizing and generalizing processes, structures, materials, components, designs, products, etc., streamlining SKUs, and effectively improving profit margins.
Profit forecast and rating: We expect the company's net profit for 2023-2025 to be 8.27, 9.41, and 1,054 billion yuan, respectively, up 16.7%, 13.8%, and 12.0% year on year. The current closing price corresponding to 2023-2024 PE is 16 and 14 times. As a leading enterprise in the furniture field, the company, as a leading enterprise in the furniture field, gave the company a PE valuation of 20 to 21 times in 2023, corresponding to a reasonable value range of 41.35 to 43.41 yuan, giving it a “superior to the market” rating.
Risk warning: raw material prices fluctuate, market competition intensifies, and downstream demand falls short of expectations.