The company announced 23-year results:
23Q4: Revenue of $3.58 billion (+0.2%), net of $320 million (-35%), net of $320 million (-27%).
23 Full year: Revenue of $21.04 billion (+1%), net of $1.88 billion (+0%), net of $1.76 billion (-2%).
Full year revenue and profit were the same as in '22, in line with our expectations. The company plans to pay a dividend of 5.34 yuan for every 10 shares, plus an H1 annual dividend rate of 40% (same as the previous year's 40%).
Revenue side: competition is slowing down, ASP is improving
23Q4: Revenue is +0.2% year over year. We expect sales volume to be around 1.6 million units in a single quarter, down in single digits; ASP increased by about +8% year on year, about +380 yuan month on month; bicycle net profit exceeded 200 yuan (about -30% year on year, about +30 yuan month over month). Under the high historical base of Q4, the company's sales volume and bicycle profit were under pressure, but ASP and structure showed marginal improvement.
Year 23: Revenue is expected to be +1%. Our estimated volume/price ratio is -0.3%/+1.4%, respectively, and the net profit of bicycles is about 175 yuan (+0.7% year over year). Looking at the overall level of '23, it remained stable and stable, and 24 young people went to battle.
Profit side: Q4 margins have now been repaired
23Q4: The gross margin was the same: 1.5/+3.8pct, and the net profit margin was the same: 4.9/-0.1pct month-on-month. Benefiting from product and channel structure improvements, the month-on-quarter recovery was remarkable.
23 years: gross margin +0.15 pct, net interest rate to mother -0.1 pct. Under intense competition pressure throughout the year, the company focused on steady profits.
Investment advice: alpha+beta opportunities exist
Our point of view:
Company level: The bottom is upward. In February, the company launched a new round of equity incentives, reaffirming the goal of 20% revenue or net profit for 24-26, consolidating and expanding domestic sales overseas, and restarting confidence in growth.
Industry level: Recently, 14 departments have jointly published a paper on electric bicycle trade-in, and the National Assembly will deploy a full electric bicycle chain overhaul to catalyze the trade-in of electric vehicles, which will benefit the further increase in the concentration of the two-wheeler industry in the long term.
Profit forecast: In 2024-2026, we expect the company to achieve revenue of 244/274/30.3 billion yuan, +16%/+13%/+11%; achieve net profit to mother of 23/28/3.3 billion yuan, +22%/+21%/+19% year over year; the current stock price corresponds to PE13/10/9X, considering the current low PEG, the company has upward elasticity at the bottom to maintain a “buy” rating.
Risk warning
Industry demand fluctuates, industry competition intensifies beyond expectations, and costs fluctuate greatly.