Incident: 2024Q1 achieved operating income of 2,065 billion yuan, +9.15% year over year, and net profit to mother of 130 million yuan, +7.06% year over year.
The growth rate of core categories was fixed and contributed by a low base, and the domestic sales growth rate gradually improved month-on-month. By category, the growth rate of rice cookers and soy milk machines was relatively good. According to data from Aowei Cloud Network, online sales of 24Q1 rice cookers/soy milk machines were +7.4%/+31.1% year-on-year; the decline in the air fryer category gradually stabilized, and 24Q1 sales were -10.5% year-on-year. By channel, the Douyin channel contributed a lot to sales. According to Mama Chan's data, the Douyin channel's 24Q1 sales ratio was +67.8% year-on-year. Total sales of the company's main categories and Douyin channels in Aowei Cloud Network were +9.5% year-on-year. The growth rate of domestic sales recovered from month to month.
2024Q1's gross margin was 26.92%, -0.95pct year on year, and the net margin was 6.32%, -0.14pct year on year.
The company's gross margin was basically flat month-on-month, and we expect that the revenue structure and domestic and foreign sales ratio will not change much from month to month.
The quarterly sales, management, R&D, and financial expense ratios of 2024Q1 were 13.23%, 4.33%, 4.25%, and -1.13%, respectively, +0.72, +0.24, -0.22, and -0.64pct.
On the balance sheet side, the company's 2024Q1 monetary capital+transactional financial assets were RMB 2,923 million, of which transactional financial assets increased by RMB 7.03 million year-on-year, mainly due to increased financial purchases; inventory was RMB 578 million, -22% YoY, and total bills receivable and accounts receivable were RMB 1,621 million, or -12.92% YoY. On the turnover side, the company's 2024Q1 inventory, accounts receivable, and accounts payable turnover days were 33.89, 38.88, and 86.24 days, respectively, compared to -12.98, +4.6, and -23.42 days year-on-year. On the cash flow side, the net cash flow from 2024Q1's operating activities was $313 million, +2.09% year-on-year, of which cash inflows from sales of goods and provision of labor services were $2,835 million, +6.85% year-on-year.
Investment advice: The growth rate of the company's domestic sales core categories has been fixed, and the decline in air bombing, which had been dragged down earlier, has stabilized. With the gradual improvement in domestic demand and the further restoration of sales in core categories, the company's revenue performance will gradually improve. The company's net profit for 24-26 is estimated to be 5.2/6/72 billion yuan, and the corresponding dynamic PE is 16.8x/14.4x/12.1x, maintaining the “gain” rating.
Risk warning: raw material price fluctuation risk; market competition risk; replacement product risk; exchange rate risk; new product sales and launch falling short of expectations, etc.