On the evening of March 28, 2024, Beiding Co., Ltd. released its 2023 annual report.

Beiding Co., Ltd. released its 2023 annual report. The company achieved annual revenue of 670 million yuan, a year-on-year decrease of 17%, achieved net profit of 71.36 million yuan, a year-on-year increase of 52%, and realized net profit of 64.03 million yuan without return to mother, an increase of 59%; of these, Q4 achieved operating income of 190 million yuan, a year-on-year decrease of 28%, and realized net profit of 19 million yuan, a year-on-year decrease of 6%. The company plans to distribute a dividend of 2 yuan for every 10 shares to all shareholders in the current period. There will be no transfer, and the corresponding dividend rate is about 91%.

Look at it by business. 1) Domestic OBM achieved annual revenue of 500 million yuan, a year-on-year decline of 16%. Of these, Q4 alone achieved revenue of 160 million yuan, a year-on-year decrease of 26%. Affected by factors such as low macro consumer demand in the fourth quarter, the company's domestic OBM business performance accelerated, but the company's offline channel and Douyin channel performed well throughout the year, with revenue increasing 27% and 32% year on year respectively. After the offline store model went live, the number of self-operated stores also increased from 23 in the same period last year to 27 at the end of the year; 2) The ODM business achieved annual revenue of 140 million yuan, an increase of 9% year on year. We speculate that Q4 achieved revenue of 26.33 million yuan, a sharp increase of 37% year on year, continuing the high growth trend since Q2. Inventory cycle support; 3) Export OBM achieved annual revenue of 26.15 million yuan, a year-on-year decrease of 55%. Of these, single Q4 achieved revenue of 6.5 million yuan, a year-on-year decrease of 81%. We speculate that it was mainly affected by the reduction in revenue recognition ratio due to the shift in direct management to distribution model.

Gross profit margin returned to the highest point since 20Q3. The company's gross margin increased 3.4 points to 54.5% year on year in the fourth quarter, returning to the highest point since 2020 Q3. We speculate that it was mainly affected by product structure upgrades driven by new products in the fourth quarter and the sharp increase in OEM business gross margin year over year. On the cost side, the company's expense ratio increased 3.7 pt to 47.0% year on year in the fourth quarter. Among them, sales/management expenses increased by 2.0 pt/ 0.7 pt year on year, respectively, due to the decline in revenue and dilution, and the absolute amount decreased by 24%/21% year on year; the R&D cost rate increased sharply by 2.6 pt year on year. We estimate that it was mainly affected by the increase in personnel and related expenses due to the increase in new product development; the financial expense ratio decreased by 1.6 points year on year, mainly affected by the sharp increase in interest income. Taken together, the company's net interest rate for the fourth quarter increased 2.3 points to 9.8% year over year.

Profit forecasting and investment ratings. Considering that the company is relatively more affected as a high-end brand under the pressure of overall consumer demand in the market, we expect the company's 2024-2026 revenue to be 730 million yuan, 81 million yuan and 890 million yuan respectively, up 10% year on year. The estimated net profit to mother is 80 million yuan, 90 million yuan and 100 million yuan respectively, up 15%, 11% and 11% year over year, corresponding PE is 31.0 times, 27.9 times and 25.1 times respectively, maintaining the “Highly Recommended” investment rating.

Risk warning: Demand for small household appliances fell short of expectations, industry competition intensified, and demand in major European and American markets fell short of expectations.