Introduction to this report:
The company's performance in 2023 was outstanding, with rapid growth at home and abroad. The volume and price of sweepers have risen sharply, new categories are gradually being expanded, and the leading advantage is stable. Increase your holdings.
Key points of investment:
The investment suggests that the company's 2023 performance is impressive. We maintain the company's 2024-2025 and increase the profit forecast for 2026. We expect EPS to be 18.45/21.09/23.97 yuan for 2024-2026, with a growth rate of +18%/+14%/+14%. Referring to comparable companies in the same industry, the company will be given 23x PE in 23 years, raised the target price to 424.27 yuan, and maintain the “gain” rating.
The performance was outstanding, increasing the dividend ratio: the company's 2023 revenue was 8.65 billion yuan, +30.6% year on year, net profit to mother was 2.05 billion yuan, +73.3% year over year; of these, 2023Q4 revenue was 2.97 billion yuan, +32.6% year on year, and net profit to mother was 690 million yuan, +110.3% year over year. The company's 2023 dividend amount was 838 million yuan, accounting for 40.85% of net profit attributable to mother (15% in 2023), and the dividend ratio was 1.86%. The dividend ratio increased significantly, increasing shareholder benefits.
Domestic and foreign sales joined forces, and the market share continued to increase: domestic and export sales each accounted for 30%/70% of total revenue in 2023, with actual domestic sales revenue of 2.63 billion yuan, +28% year over year (+23%/+32% for H1/H2, respectively). The P10 cost-effective series of products launched in Q2 increased in volume in the second half of the year, driving the company's market share from 21% in 2022 to 24% in 2023. Export sales revenue was 6.04 billion yuan, +32% (+12%/+48% for H1/H2 respectively). The US maintained a hot sales trend throughout the year, and Eurasian H2 was more flexible.
Gross margin increased significantly, and net profit in Europe and Asia increased dramatically: in 2023, the company's gross margin of export/domestic sales was 61.7%/53.1%, +8.6pcts/+6.5pcts. The main reason for the increase in gross profit was successful cost reduction and an increase in the share of high-margin product structures. We estimate that the net distribution interest rate in Europe/Asia Pacific will exceed 30% by the end of the year, and the short-term order flexibility of the distribution model will greatly drive profit growth.
Risk warning: Increased competition in overseas markets, risk of fluctuations in export tariffs