Events: The company released its 2023 three-quarter report. In the first three quarters, it achieved revenue of 2,547 billion yuan, +2.35%; net profit of 166 million yuan, +1.04% year-on-year; net profit deducted from the mother's mother of 109 million yuan, +13.90% year-on-year.
Comment:
Overall performance was in line with expectations, and category performance was slightly divided. Looking at a single quarter, 2023Q1/Q2/Q3 companies achieved revenue of 5.75/9.32/1,041 billion yuan, a year-on-year difference of +1.08%/+8.05%/-1.62%, respectively; and realized net profit of 0.33/0.44/0.90 billion yuan, a year-on-year difference of +8.18%/-29.86%/+24.79%, respectively.
By category, in the first three quarters, the company's core category of overall kitchen cabinet/closet revenue was -5.54%/+11.29%. The revenue scale of wooden doors and other categories was relatively small, with revenue of +53.38%/+332.33%, respectively. It is expected that in the future, with the expansion of the company's stores and the deepening of the integration of major housing strategies, the company's performance is expected to maintain steady growth.
Cost reduction and quality improvement have led to a further increase in gross margin. The company's gross margin for the first three quarters of 2023 was +0.41pct to 28.90% year-on-year. We believe it was mainly due to lower raw material procurement prices and improved quality and efficiency in the company's own operations. The company's sales/management/R&D/financial expenses for the first three quarters of 2023 were -0.10pct/+0.03pct/+0.07pct/+0.07pct/-0.24pct to 12.85%/4.95%/5.56%/-0.18%, respectively. Under the combined influence, the company's net interest rate for the first three quarters decreased by 0.09pct to 6.40% year on year. It is expected that the company's brand strength will continue to improve in the future, store optimization and improvements are completed, and the company's profit level is expected to improve.
Channel expansion and adjustments continue to be carried out to facilitate long-term development. Looking at each channel, in the first three quarters of the company, dealerships, direct-run stores, major businesses, overseas and other revenues were +5.44%/-28.87%/-3.72%/+19.47%/+594.47%/+594.47%, respectively, to 13.27/0.67/8.74/2.00/014 million yuan. In terms of the number of channels, at the end of the third quarter of 2023, gold medal kitchen cabinet/gold medal wooden door/decoration hall/balcony bathroom/balcony bathroom/Manio stores were +39/+101/+101/+105/+60/+22/+20 respectively at the beginning of the year to 1831/1192/666 151/96/140. The company's short-term channel expansion has accelerated, the store structure has been adjusted, and some direct-run stores have been transferred to distribution. It is expected that as the company's store adjustments are completed and the customer acquisition advantages of the integrated channel are strengthened, the company is expected to benefit first from the recovery in consumption.
Investment advice: Manage optimization in an orderly manner, and be optimistic about the long-term growth of the company. The optimization of the company's organizational structure will continue to improve operational efficiency, but considering the current recovery of the consumer environment, we have slightly adjusted the company's profit forecast. The company's net profit for 2023-2025 is estimated to be 3.14/3.63/415 million yuan (original value 4.11/501/575 million yuan), corresponding to the current market value PE of 13/11/10X, respectively, maintaining the “increase in holdings” rating.
Risk warning: Management optimization falls short of expectations, raw material costs fluctuate greatly, and industry competition intensifies.