The company announced 2023 results:
23Q4: Revenue of $71 million (+20.2%), net of $57 million (+140.1%), net of $38 million (+103.3%).
Year 23: Revenue of $3.20 billion (+10.3%), net profit attributable to mother of $410 million (+41.4%), net of not $390 million (+40.5%).
Dividends: The operating target was achieved throughout the year. In addition, the company's dividend ratio in '23 corresponds to 51%, which is a significant increase from 30% in previous years.
Revenue analysis: export sales and freezers are the core growth engines
By region in '23: Export sales drive the company's growth. It is expected that the main export regions will be the fastest in the Middle East and South Asia, the growth rate will recover at a low base in Europe, and steady growth in North America. In '23, the company's domestic sales business reached 2.14 billion yuan, the same as the previous year, and the export business reached 970 million yuan, +41% over the same period last year.
By category for 23 years: Refrigeration remained leading. Single customers in refrigeration and supermarket storage disrupted freezer revenue of 2.08 billion yuan, +17.9% year-on-year. We expect domestic sales in the refrigeration sector to grow relatively steadily, and export sales will benefit from rapid growth in overseas markets such as Southeast Asia;
The revenue of refrigerators in 23 years was 570 million, +5.1% year-on-year. We expect that single customer adjustments will affect the growth rate, and export sales will still increase;
The revenue of supermarkets in 23 years was 220 million yuan, or -31% year-on-year. The year-round decline was also affected by single customer adjustments, and the share of export sales was low;
The revenue of smart cabinets was 180 million in 23 years, +9.5% year-on-year, and the new business is still being cultivated.
Overall, the company maintains a leading share in the refrigeration sector, while refrigeration and supermarkets are disrupted by a single customer, and the impact is expected to weaken in 24 years.
Profit analysis: benefit structure optimization, export sales increase and bulk cost contribution
The company's profit increased in '23, with an overall gross margin of +6pct, of which domestic and foreign sales gross margin were +3.2pct/+10pct each; net margin of +2.4pct mainly contributed to product structure, increased share of export sales, and price reduction in bulk costs.
Expense rate: 23-year sales rate 7.6%, +2.4pct year; 23-year management rate 3.3%, +0.2pct year; 23-year R&D rate 3.4%, -0.3 pct year; Among them, sales expenses increased due to the shift in distribution to direct management in some of the company's export regions. It is expected to remain stable in the later stages, and it is unlikely that it will continue to increase significantly.
Investment advice: export sales continue to be booming, domestic sales maintain a leading edge, and maintain “buying”
Our point of view:
The company's revenue target for 24 years is 32-3.55 billion yuan (year-on-year growth range is 0-10%). We expect domestic sales to remain the core of growth. The company aims for domestic sales to maintain its leading position in freezers with strong competitiveness. The cold storage market competition at low prices this year will affect profit margins downward, and the company expects to maintain careful participation; overseas trends such as Yilimon beef and a large number of small and medium-sized brands will not decrease, and the company's product innovation speed is better than that of its rivals. It is expected that the company will take advantage of the Southeast Asian trend to further increase the export of smart products in '24.
Profit forecast: Revenue for 24-26 is expected to be 35.1/38.5/4.21 billion yuan, with corresponding growth rates of 9.6%/9.5%/9.6%, and net profit to mother of 4.6/50/ 550 million yuan, respectively. The corresponding growth rates are 10.5%/8.8%/11.1%, respectively. Fluctuations in commodity raw material prices may be the main disruptor to profit margins, corresponding to PE 14/13/11X, corresponding to a dividend rate of about 3.4% for 24 years, maintaining the “buy” rating.
Risk warning
Industry sentiment fluctuates, competition intensifies, raw material prices fluctuate greatly, and exchange rates fluctuate greatly.