Overall revenue was under pressure in '23, and net profit recovered actively, maintaining the disclosure of the 2023 annual report by the purchasing company. The company achieved revenue of 665 million yuan, -17.33% YoY, and net profit attributable to mother of 0.71 million yuan, +51.92% YoY. Net profit was in line with the previous performance forecast range. Among them, 4Q23 revenue was -20.63% YoY and -5.58% YoY. Furthermore, the company plans to pay a dividend of 0.2 yuan per share. Considering the fragmentation of the company's domestic consumption boom and the recovery of overseas demand, the aftermath of the company's overseas sales model adjustments is still there. We adjusted our 24-25 forecast and introduced a 26-year EPS forecast of 0.30, 0.32, and 0.37 yuan (0.42 and 0.47 yuan before 24-25 years ago). As of 2024/3/28, Wind agreed that the company's average PE in 2024 was 20x. Although demand is still fluctuating, the company is a scarce target for high-end small household appliances, and considering the continuous promotion of the company's cost optimization and cost reduction and efficiency, net Profit recovery expectations are still strong. The company was given 30 x PE for 24 years, corresponding to a target price of 9.0 yuan (previous value of 10.89 yuan), maintaining a “buy” rating.

The overall decline in domestic revenue in the fourth quarter of '23 has not been reversed

In the domestic market, the domestic revenue of the Beiding brand in '23 was -15.5% (-16%/-26% year-on-year in 4Q23/3Q23, respectively). By channel, 1) The pressure on online Tmall and JD channels is quite obvious, and Douyin continues to grow. According to the annual report, the direct sales revenue of the Beiding brands Tmall, JD, and Douyin was -30.2%, -27.8%, and +32.8%, respectively. The scale of Douyin is still low (23 million yuan in revenue), and its momentum is limited. 2) The revenue of self-operated stores through offline channels was 39 million yuan, +27.2% year-on-year. The company added a net of 4 stores in '23, and continues to focus on experiential consumption and brand display.

Overseas OEM has grown actively in 23 years, and overseas independent brands have yet to establish a base in overseas markets. In '23, Beiding's overseas/ODM revenue was -64.7%/+9.2% (4Q23 was -81.3%/+37.4%, respectively). Among them, the ODM business has maintained a positive growth trend since 3Q23, but the aftermath of the adjustment of the overseas independent brand business from a self-operated model to a distribution model is still obvious, and the quarterly performance is still weak.

The gross margin of all businesses rebounded year on year in '23. The gross margin of the company with the largest year-on-year decline in expenses during the period was 50.75% in 2023, +2.01 pct year on year. Among them, 4Q2023 gross margin was +3.4pct year over year. The gross margins of all businesses showed a year-on-year recovery. The company's overall expense ratio in 2023 was 2.53 pct year over year. Among them, the main sales expenses ratio was -3.45pct year-on-year, or 28.04%. Management Expense Rate/R&D/Finance Expense Ratio were -0.15pct/+1.71pct/-0.64pct, respectively.

It is expected that efficiency will continue to be optimized internally, and operating leverage may drive the net profit margin to continue to recover 4Q23/3Q23. The company's net interest rate will recover to 9.8%/9.76%, +2.33pct/+7.26pct, respectively, and gradually approach the average net profit margin level of 13% in 2019-2021. As the company continues to increase internal efficiency, overseas OEM revenue has now recovered, domestic and offline trends have been maintained, or operating leverage optimization may be further promoted. We are still optimistic about the recovery of the company's profit margin level.

Risk warning: Domestic market development is blocked. Overseas demand fluctuates. Competition in the industry has intensified.