On March 27, the company released its fiscal year 23, achieving revenue of 800 million yuan for the full year, -14.2% year on year, and net profit to mother of 101 million yuan, or -23.2% year on year. 23Q4 achieved revenue of 220 million yuan, +48.4% year over year, net profit to mother of 0.2 billion yuan, -8.2% year over year. At the same time, it announced a dividend of 0.8 yuan (tax included) per share for 23, and a dividend payment rate of 90.09% for 23.
4Q downstream customers went to the warehouse to resume orders, and gradually expanded the hardware category.
The 1Q/2Q/3Q/4Q company's revenue growth rate was -18.6%/-41.3%/-13.8%/+48.4%, and showed a quarterly recovery trend. By category, the sports outdoor/home life/health care business was 3/4.2/51 billion yuan, -25%/-2.5%/-21.7% year-on-year, and 2H23 revenue remained flat/+21%/+3% year-on-year. During the reporting period, the company's major downstream customers, such as Decathlon and Ikea, were affected by factors such as high inventory in the early period and weak overseas consumption due to inflation. Orders fluctuated in the short term. Starting 2H, along with the steady restoration of orders from old customers, the development of new products in the hardware category, and the introduction of new customers, etc., the order repair trend was remarkable.
Raw material cost pressure weakened, and gross margin performance was excellent, and short-term cost ratios expanded due to the transformation of new projects. The 23-year gross profit margin was 27.3% (+2.2pct), by category, the gross profit margin of the 23-year sports outdoor/home life/health care business was 32.4%/25.5%/9%, compared to +2.9/+3/-2.1pct, 4Q gross profit margin 23.2% (-3.2pct), mainly due to changes in product order structure and depreciation and amortization of new production capacity. The 23-year sales/management & R&D expense ratio was 0.69%/14.1%, compared with +0.2/+4.3pct. The increase in the cost ratio was mainly due to new investment and real estate conversion, depreciation and amortization in Shishi and Malaysia, with a net interest rate of 12.65% (-1.5pct).
Export sales are recovering steadily, expanding categories to open up incremental space, and Southeast Asia's layout is leading the industry. As a high-quality outdoor & household goods foundry platform, the company has outstanding advantages in product design and multi-process integration. The future growth focus is to expand customers & share. In recent years, new retail & brand customers, newly expanded orders from high-quality customers such as MERCADONA, Helen of Troy, TARGET, Dengkang Dental (cold acid), Dr. Bei, etc. are gradually increasing. The Malay layout ensures supply chain safety, deepens customer binding, and is optimistic about steady and high-quality growth in the medium term.
We expect the company's net profit to be 1.35, 1.63, and 207 million yuan over the same period last year, +34%/+21%/+27%. Considering that the company helps customers grow with product stability and personalized service capabilities, the hardware expansion category is expected to open up incremental space. The current stock price is 18, 15, and 12X for 24-26 PE, respectively, maintaining a “buy” rating.
The risk of order recovery falling short of expectations; risk of exchange rate fluctuations; risk of large fluctuations in raw material prices; 3.7 million restricted shares were lifted in March, accounting for 3.25% of the total share capital.