Core views:
The company released a three-quarter report, and the company's performance was under pressure in 23Q3. 2023Q1-Q3 had revenue of 620 million yuan (YoY -12.1%); net profit attributable to mother of 140 million yuan (YoY -8.3%); deducted non-net profit of 120 million yuan (YoY -9.7%). 23Q3 revenue was 170 million yuan (YoY -32.5%); net profit attributable to mother was 0.3 billion yuan (YoY -47.2%), after deducting non-net profit of 0.2 billion yuan (YoY -52.7%).
The integrated stove industry is under pressure as a whole. Although overall demand for kitchen appliances has rebounded due to the “insurance and handover” policy, the integrated stove market is still concentrated in third- and fourth-tier cities, and the recovery in demand is weaker than that of the kitchen appliance industry as a whole. According to Aowei data, retail sales in the integrated stove industry fell 7.6% in 23Q3, and retail sales fell 4.7%.
In 23Q3, the company's gross margin improved, and net profit margin declined. The company's gross margin increased to 47.5% (YOY+0.9pct) in 23Q3, mainly due to lower raw material costs and improved product structure. In terms of cost ratios, the cost ratio increased a lot due to the decline in the revenue base. The 2023Q3 sales/management/financial/ R&D expenses rates were 20.5%/10.0%/-5.1%/7.1%, respectively, +3.9 pct/+3.8 pct/-2.1pct/+3.7 pct compared to the previous year, and the net profit margin to mother was 15.1% (YOY-4.2pct).
The channel is being actively expanded, and the number of dealers is close to 1,300. The company actively improves both the number and quality of dealers through initiatives such as trade exchanges, new investment promotion, and strengthening distribution management. As of 23H1, the company has added and optimized more than 100 dealers, keeping the number of dealers close to 1,300. Offline physical stores have achieved full coverage above prefecture-level cities across the country.
Profit forecast and investment advice: The company's net profit for 2023-25 is expected to be 1.7, 210 million yuan, and 250 million yuan, respectively, with year-on-year growth rates of -19.4%, 23.7%, and 17.5%, respectively. The latest closing price corresponding to 2024 PE is 14.03x. Taking into account comparable company valuations and performance growth rates, the 2024 PE15x was given, corresponding to a reasonable value of 17.42 yuan/share, maintaining the “gain” rating.
Risk warning: raw material prices have risen; exchange rates have fluctuated greatly; industry demand is weakening.