Incidents:
Supor announced its 2023 annual report. The company achieved revenue of 21.304 billion yuan, YOY +5.62%; net profit to mother of 2.180 billion yuan, YOY +5.42%. Among them, 23Q4 achieved revenue of 5.937 billion yuan, YOY +14.39%; net profit to mother of 818 million yuan, YOY +7.77%. The 2023 cash dividend plan is based on a total share capital of 797 million yuan, with 27.3 yuan (tax included) for every 10 shares, and the annual cash dividend ratio is 100%.
Comment:
Export sales increased significantly in 2023, and domestic sales surpassed industry headwinds. Looking at the subregion, on the domestic side: the company's domestic sales revenue in 2023 was 15.108 billion yuan, YOY +0.88%, and the domestic sales business achieved positive revenue growth in the headwind under pressure from the industry. The reason was that new channels contributed to growth, and the categories needed were stable. By product, the company met diversified consumer needs in the open flame cookware business, small kitchen appliances business, household appliances business, and kitchen and bathroom appliances business. The operating income of cooking appliances YoY +4.53% (annual report disclosure) explores new categories such as semi-automatic coffee machines. By channel, the online and offline market share of core categories continues to rise. Online: According to Aowei Cloud Network monitoring data, the online market share of Supor cookware increased by 24 pct year on year in 2023, leading the second brand by more than 4 times. The company continued to promote direct management, agency and single inventory models, and worked with dealers and proxy operators to build a complete e-commerce store matrix to provide a differentiated product portfolio for different consumer groups. While stabilizing channels such as Tmall and JD, we are increasing profits and expanding private traffic through new platforms such as Douyin and Pinduoduo. Offline:
The company already has a huge number of sales terminals and service outlets, has entered large-scale mainstream supermarkets in the primary and secondary markets, and has a high coverage rate of O2O channels in the tertiary and fourth level markets to ensure that consumers can purchase the company's products more easily.
Foreign side: In 2023, the company's export revenue was 6.196 billion yuan, YOY +19%, of which parent company SEB contributed 5.66 billion yuan and YoY +21%. In the second half of 2023, thanks to SEB Group's own organic growth and channel inventory replenishment requirements, and its low base, related transaction announcements showed that the company's total export-related transactions amounted to 5.7 billion yuan in 2023. The company's export business boom continued to recover, and the export sales business grew rapidly throughout the year.
Gross profit margin has been rising steadily, increasing investment in R&D expenses. In 2023, the company's gross margin was 26.3%, +0.52 pcts year on year. The increase in gross margin was mainly due to the company's continuous optimization of product structure, continuous improvement of channel efficiency (one-plate freight forwarding operation), low raw material prices, and management optimization. The company's net interest rate for the year 23 was 10.2%, -0.02pcts year on year, 13.8% for 23Q4, and -0.85pcts year on year. Profitability remained stable. The 23-year sales expense ratio was 10.8%, YOY+0.10pcts. The main reason was the e-commerce platform promotion; the management fee rate/R&D expense ratio was 1.9%/2.0%, and the R&D cost rate decreased slightly year-on-year. In terms of balance sheet, the company's net cash (monetary capital+transactional financial assets+derivative financial assets+other current assets - short-term loans - long-term loans - bonds payable) at the end of 2023 was 3.842 billion yuan, a year-on-year decrease. Accounts payable increased 22% year over year in '23. In terms of cash flow, the company's net operating cash in '23 was 2,035 billion yuan, a sharp decrease over the previous year.
Profit forecast, valuation and rating: In 2023, the company's export sales achieved significant growth, and continued to promote cost reduction and efficiency. While consolidating superior categories, the company's performance will usher in continuous growth. The company's net profit forecast for 2024-25 was raised to 2.38 billion yuan (up 1.9%/0.0% from the previous forecast, respectively), and the net profit forecast for 2026 was added to 2.80 billion yuan. The current price corresponds to PE 20, 18, and 17 times, maintaining the “buy” rating.
Risk warning: New product expansion falls short of expectations, overseas sales are weak, and raw material prices are rising.