Incident: In 2023, the company achieved revenue of 8.65 billion yuan, a year-on-year increase of 30.5%; net profit to mother of 2.05 billion yuan, an increase of 73.3%; net profit after deduction of 1.83 billion yuan, an increase of 52.5% over the previous year. Looking at a single quarter, Q4 achieved revenue of 2.97 billion yuan, up 32.6% year on year; net profit to mother of 690 million yuan, up 110.3% year on year; net profit after deducting 570 million yuan, up 68.6% year on year. In 2023, the company's dividend rate (including repurchases) was 840 million yuan. The total dividend amount to the net profit ratio of the current period increased from 15.2% in 2022 to 40.9% in 2023.
Sweeping robots are increasing in volume and price, and floor scrubbers are developing rapidly. By product, the production and sales volume of the company's smart sweepers and accessories increased 29%/15.5% year-on-year to 2.873 million units/2.595 million units, respectively, and revenue increased 27.4% year-on-year to 8.09 billion yuan, with volume and price increases; production and sales of other smart appliances increased 111.6%/109.8% year-on-year to 299,000 units/256,000 units, respectively, and revenue increased 109.4% year on year to 550 million yuan.
At a regional level, domestic and foreign sales achieved revenue of 4.41 billion yuan/4.23 billion yuan, respectively, an increase of 41%/21.4% year-on-year. By sales model, direct management and distribution achieved revenue of 3.63 billion yuan/5.01 billion yuan respectively, an increase of 61.2%/15% year-on-year. Domestic market companies' share of retail sales of sweeping robots reached 23.9%, up 2.6% year on year. Overseas markets continued to enrich channels and promote product upgrades, driving a sharp increase in overseas volume and price. As the company built its own channels overseas, domestic revenue grew rapidly, and it is expected that the share of direct management will continue to increase in the future.
Improved product structure leads to increased profitability. The gross margin of the company's main business increased by 6pp to 55.3% year on year in 2023. Among them, the gross margin of smart sweepers and accessories/other smart electrical products was 56.2%/43.3%, respectively, +6.6pp/ -1.2pp. Domestic sweepers mainly relied on new and explosive products such as the P series to drive gross margin, while foreign countries continued to promote product upgrades to raise gross margin levels. In terms of cost ratio, the company's sales/management/ financial/ R&D expenses in 2023 were 21%/2.4%/-1.6%/7.2%, respectively, +1.1 pp/+0.3 pp/-0.2 pp/ -0.2 pp, respectively. In terms of net interest rate, the company's net profit margin increased by 5.8pp to 23.7% year-on-year in 2023, and profitability increased steadily, mainly due to the increase in gross margin.
Consolidate the company's technical barriers and continue to enrich overseas channels. In 2023, the company invested 620 million yuan in R&D, an increase of 26.7% over the previous year. The company continued to transform R&D investment into a product advantage, and sales of the P series launched in Q2 2023 increased rapidly; in terms of channels, the company deepened the mainland and expanded internationally to achieve sustainable business development at home and abroad. The products are spread in more than 170 countries and regions around the world. More than 15 million households have used stone sweeping robots. It is expected that it will continue to enrich overseas countries and channels to drive overseas The market is developing rapidly.
Profit forecasting and investment advice. The company has continuously increased investment in R&D to enhance the core competitiveness of sweeper robots. The product structure at home and abroad has been upgraded, channels continue to be rich, and volume and price increases; floor washer products have developed rapidly, becoming the company's second growth curve. The company's 2024-2026 EPS is expected to be 19.22 yuan, 23.05 yuan, and 28.29 yuan respectively, maintaining a “buy” rating.
Risk warning: Risks such as domestic and foreign demand falling short of expectations, channel expansion falling short of expectations, and increased competition.