The year-on-year revenue growth rate was corrected, and profitability was under pressure. The company released its 2024 quarterly report on April 17. 24Q1 achieved revenue of 2,065 billion yuan (yoy +9.15%), and net profit of 130 million yuan (yoy +7.06%). Affected by the general environment, consumer consumption behavior is biased towards rationality. Coupled with the decline in offline market sentiment in the small home appliance industry, short-term company profitability may be under pressure. We maintain the company's 2024-2026 EPS forecast at 0.60, 0.64, and 0.71 yuan, respectively. Comparable companies averaged 21x PE in 2024, according to Wind's unanimous expectations. As an industry leader, the company operates steadily and deepens its multi-category layout. The “Joyang” and “Shark” brands jointly promote the company's development. We gave the company 22xPE in 2024, corresponding to a target of 13.2 yuan (previous value: 12 yuan), and maintained a “buy” rating.
The year-on-year revenue growth rate was corrected, and 24Q1, which launched a variety of new products to enrich consumption scenarios, the company's revenue was +9.15% year-on-year. On the one hand, the company continues to be deeply involved in the small kitchen appliance sector, applying space technology to innovation in small appliances, and launched new products such as the 0 coated non-stick rice cooker N1S, the variable frequency light and quiet wall breaker B1, the Space Heat Small Clean R5, and V1Fast. On the other hand, the company has accelerated the layout and segmented into emerging categories and launched healthy appliances such as high-speed hair dryers and anti-entanglement floor scrubbers, and strives to move product usage scenarios from the kitchen to the whole house. As a leading enterprise in the domestic small home appliance industry, the company is expected to continue to innovate and break through with outstanding R&D capabilities and channel construction to seize new trends and opportunities in the market.
Profitability is under pressure in the short term, and the sales expense ratio is +0.72pct year-on-year
The 24Q1 gross margin was 26.92%, -0.95pct year-on-year. At the cost level, the 24Q1 company's total rate was +0.10pct year over year. In order to further implement the “Joyang” and “Shark” two-wheel drive brand development strategies, the company increased publicity campaigns. 24Q1 sales expenses were +15.47% year-on-year, and sales expenses were +0.72pct year-on-year. The company's financial expenses were -151.40% year-on-year, and the financial expenses ratio was -0.64pct year-on-year, mainly due to an increase in interest income. Furthermore, the company's management expense ratio was +0.24pct year over year, and the R&D expense ratio was -0.22pct year over year. The company's 2024Q1 net margin was 6.32%, -0.13pct year-on-year.
The online/offline boom performance of the domestic small household appliance industry is divided. In a macroeconomic environment where challenges and opportunities coexist, consumer consumption is biased towards rationality, and the online/offline boom performance of the domestic small household appliance industry is divided. According to Aowei Cloud Network, the 2024Q1 domestic online market sales/sales volume were +15.49%/+10.71%, respectively, and offline market sales/sales volume were -0.29%/-3.29%, respectively.
Facing market challenges, the company may seize opportunities through continuous improvement of diversified channel construction. Online, the company's layout expands diversified online brand flagship stores and live broadcast rooms, and is committed to achieving a closed loop of sales with the shortest link; offline, the company continuously improves and optimizes the offline sales network, explores new retail business models, and realizes O2O integrated development and high-value transformation for consumers.
Risk warning: increased market competition; risk of high inflation overseas; risk of new products falling short of expectations.