Event: On March 28, 2024, Joyang Co., Ltd. released its 2023 annual report. In 2023, the company achieved revenue of 9.613 billion yuan (-5.54% YoY) and net profit to mother of 389 million yuan (-26.58% YoY). In a single quarter, 2023Q4's revenue was RMB 2,832 million (-12.92% YoY) and net profit to mother was RMB 26 million (+2.52% YoY).
The export sales of 2023H2 grew rapidly, and Western-style appliances grew in double digits. 1) By business, the revenue of 2023H2's food processing machines/nutritional cookware/ Western appliances/cookware series products was 29.40/36.97/23.06/421 million yuan, respectively, -4.35/ -6.26/+22.71/ -33.24% year-on-year, respectively. Among them, Western-style appliances achieved double-digit growth against the trend. 2) By region, 2023H2's domestic/overseas revenue was 73.74/2,239 billion yuan, respectively, -16.39/ +85.84% year-on-year, respectively. Among them, the high increase in export sales revenue may be driven by a recovery in overall overseas demand.
2023Q4's profitability is relatively steady. 1) Gross profit margin: 2023Q4 achieved a gross profit margin of 27.00%, -2.84pct year over year, or due to changes in channel structure. 2) Net interest rate: 2023Q4 net interest rate was 0.91%, +0.16pct year-on-year, and the performance was relatively steady. 3) Expense side: 2023Q4 company's sales/management/R&D/finance expense ratios were 18.84/4.75/4.79/ -0.32%, respectively, +1.21/+0.61/+0.30/ -0.17pct year-on-year, respectively.
Investment advice: On the industry side, with domestic economic recovery and export chain improvements, overall demand is expected to pick up. On the company side, the product matrix continues to be enriched, channel construction continues to expand, digital advantages enable efficiency improvement, and the company's revenue performance is expected to grow for a long time. We estimate that in 2024-2026, the company's net profit attributable to mother will be 466/561/613 million yuan, corresponding EPS of 0.61/0.73/0.80 yuan, respectively, and the PE corresponding to the current stock price will be 16.93/14.07/12.88 times, respectively. Maintain a “buy” rating.
Risk warning: Fluctuations in prices of major raw materials, declining demand in overseas markets, exchange rate fluctuations, increased market competition, tight shipping capacity, etc.