Core views
The company recently disclosed its 2023 performance forecast. In 2023, the company achieved a 2-3% increase in operating income and achieved net profit of 32—340 million yuan, an increase of 388.1%-418.6% over the previous year; the corresponding net profit to mother for the fourth quarter was approximately 176-196 million yuan, an increase of 187.3% to 220.0% year on year. The net profit margin corresponding to the fourth quarter results was about 7.5%-8.7%, up 1.5pct-2.7pct from the third quarter. Against the backdrop of declining real estate, in 2023, the company actively exploited overseas markets and sinking markets in counties and achieved certain results, turning revenue and profit losses into profits. It is expected that the company will further recover its performance in 2024.
occurrences
The company disclosed the 2023 performance forecast, and the net profit for 2023 is expected to be 32—340 million yuan, an increase of 388.1%-418.6% year-on-year.
Brief review
Fourth quarter results achieved high growth. In 2023, the company achieved operating income of 780 to 7.88 billion yuan, a year-on-year increase of 2-3%; achieved operating income of 22.5-2.33 billion yuan for the fourth quarter, an increase of 0.6%-4%; realized net profit to mother is expected to be 32 to 340 million yuan, an increase of 388.1%-418.6%; and net profit for the fourth quarter was about 1.76 to 196 million yuan, an increase of 187.3% to 220.0% year on year. The net profit margin corresponding to the fourth quarter results was about 7.5%-8.7%, up 1.5pct-2.7pct from the third quarter. The increase in net interest rates is mainly due to: 1. A slight increase in gross margin due to lower raw material prices; 2. Sales management expenses are diluted.
The county and overseas markets continue to gain strength. On the one hand, the company promoted the decline of multi-category sales channels in counties, and the growth rate of the county market was much higher than that of the provincial capital/prefecture-level city market during the year; on the other hand, it continued to promote international business: by the first half of 2023, the company had set up 13 overseas warehouses to replicate China's warehousing sales model; it also set up subsidiaries in India, Vietnam and other countries. Overseas revenue increased 9.7% year-on-year in the first half of 2023.
Maintain a buy rating. We expect the company's revenue in 2023-2025 to reach 78.1/84.3/9.03 billion yuan, and net profit to mother will reach 3.3/4.3/5.60 billion yuan respectively, corresponding EPS of 1.01/1.33/1.86 yuan, and corresponding PE of 38/29/21 times. In 2023, the company gradually adjusted its business structure in the context of declining real estate to turn revenue and profit into profit. In 2024, the company's performance will maintain a recovery trend and maintain a “buy” rating.