Incident: On February 6, 2024, the company announced a plan to repurchase the company's shares.
Active buybacks demonstrate long-term confidence. The company announced that it intends to carry out repurchases through centralized bidding transactions. The repurchase price shall not exceed RMB 18 yuan/share (inclusive), the repurchase amount shall not be less than RMB 50 million (inclusive), and no more than RMB 100 million (inclusive) of shares. The repurchased shares will be used for employee stock ownership plans or share incentives in the future according to the actual situation of the company. This buyback shows the company's confidence in future business development, as well as feedback and support for investors. The equity incentive plan is also expected to further enhance employee enthusiasm and continue to create higher value.
The brand building has achieved remarkable results and strong performance. In addition to the company's main brand “Rambler”, many brands such as the new young brand “Huazai”, the e-sports brand “HECATE”, and the cost-effective brand “Shengmai” have achieved remarkable results. On January 16, 2024, the company announced its 2023 performance forecast. Net profit due to mother is expected to increase by 60%-80% over the same period last year. The 2024 Spring Festival is relatively late. The downstream preparation time for the Spring Festival may be delayed until January 2024, and the company's performance in 2023 was strong, or more bonuses and some expenses for 2024 were calculated. The company's actual operating prosperity is expected to be better than its performance.
Overseas markets have huge potential and are expected to grow rapidly. According to the company's 2023 mid-year report, about 20% of the company's revenue comes from overseas, and there is plenty of room for improvement at a lower rate. The company has stepped up efforts to expand overseas markets, set up product development and sales teams from different countries, and built a marketing network to successfully sell products to the world. In terms of overseas e-commerce sales, the company has achieved rapid business growth and steady improvement in user reputation in international e-commerce channels such as Amazon. It is expected that the company's overseas market expansion rate will be greatly accelerated in the future, and it is expected that overseas and domestic revenue will be comparable in the long run.
New products such as AI are expected to open up new growth opportunities. (1) On January 8, 2024, the company responded on the investor interactive platform that it has used or will use related AI technology in many product development. The company will actively pay attention to the development and application of artificial intelligence, and continue to explore integration with the company's products based on its own technology in the fields of electronics and acoustics. As a scarce high-brand independent audio manufacturer in China, future AI-enabled intelligent assistant products are expected to simultaneously increase demand and terminal value, which will greatly benefit the company. (2) The company has entered the hearing aid market. The newly launched in-ear, 32-channel, binaural noise reduction hearing aids have been certified as medical devices and are expected to serve more people.
Maintain an “Overweight” rating. Our forecast for the company's 2023-2025 results is revenue of 2,625/31.03/36.69 billion yuan and net profit to mother of 427/5.37/686 million yuan, maintaining an “incremental” rating.
Risk warning: Risk of AI technology falling short of expectations; risk of rising raw material prices and labor costs; risk of increased industry competition; macroeconomic risk.