On March 29, 2024, Joyang Co., Ltd. released its 2023 annual report.
Joyoung Co., Ltd. released its 2023 annual report. In 2023, the company achieved operating income of 9.61 billion yuan, a year-on-year decrease of 5.5%, and realized net profit of 390 million yuan, a year-on-year decrease of 26.6%; of these, Q4 achieved operating income of 2.83 billion yuan, a year-on-year decrease of 13%, and realized net profit to mother of 25.53 million yuan, an increase of 0.9% year-on-year, and realized net profit of 14.34 million yuan, a year-on-year decrease of 84.2%. The company plans to distribute a cash dividend of 1.5 yuan for every 10 shares to all shareholders in this period. There is no transfer, and the corresponding dividend rate is about 29%.
The export boom continues, and domestic sales continue to be under pressure. The company's revenue fell 13% year on year in the fourth quarter. Looking at the subregion: 1) On the export side, the company achieved annual revenue of 2.24 billion yuan, an increase of 69% year on year, of which revenue in the second half of the year increased 86% year on year. Continuing the booming trend of the previous period, according to SharkNinja's annual report, SN's fourth quarter revenue (adjusted) increased 19.7% year on year, and the growth rate was clearly accelerated by 14.6% in Q3. We speculate that SN's strong sales boom in the fourth quarter plus inventory replenishment demand strongly supported Joyang's export business in the fourth quarter; 2) On the domestic sales side, the company achieved revenue of 7.37 billion yuan for the whole year, a year-on-year decline of 16.7%, with revenue for the second half of the year falling 16.4% year on year. According to Jiuqian statistics, the total GMV of the Joyang brand Tmall, JD, and Douyin fell 9.2% year on year in the fourth quarter, and the overall pressure was obvious.
Profit side: The company's gross margin fell 2.8 pct to 27.0% year on year in the fourth quarter. We estimate that it was mainly affected by factors such as structural changes and product restructuring brought about by the increase in the share of export sales revenue. On the expense side, the company's expense ratio for the fourth quarter was 28.1%, up 1.2 pct year on year. Among them, sales/management expenses increased by 1.2 pct/0.6 pct year on year, respectively. The main impact was due to the year-on-year decline in revenue. Expenses all decreased to varying degrees year over year, and the financial expense ratio decreased slightly by 0.2 pct year over year. In addition, Q4's fair value change losses decreased by 33.91 million yuan year on year, and investment income increased by 82.15 million yuan year on year, which collectively positively affected the operating profit margin of 3.8 pct. Taken together, the company's net profit margin for Q4 was 0.9%, up 0.2 pct year-on-year. In terms of cash flow, the company's net operating cash flow for Q4 was 330 million yuan, a significant increase over the previous year. It was mainly affected by a sharp 38% decrease in cash from purchasing goods and receiving labor payments over the same period last year.
Profit forecasting and investment ratings. The company announced related transactions in 2024. It is expected that SharkNinja and JS Global Life will have sales related transactions of US$220 million in 2024, down 24% from the amount generated in 2023. At the same time, considering that domestic demand for small household appliances is still under overall pressure, we expect the company's revenue for 2024-2026 to be 10 billion yuan, 11 billion yuan and 12 billion yuan respectively, up 4%, 10% and 10% year-on-year, respectively. The net profit is expected to return to mother of 410 million yuan, 540 million yuan and 620 million yuan respectively Yuan, with year-on-year increases of 21%, 14%, and 14%, respectively. Corresponding PE was 17.0 times, 14.9 times, and 13.0 times, respectively, giving an “increase in wealth” investment rating.
Risk warning: Market demand falls short of expectations, market competition intensifies, and completion of related transactions falls short of expectations.