Introduction to this report:
The company just needed stable performance in categories, and new products still have sufficient potential for growth and increase in holdings.
Key points of investment:
As overall demand in the industry is slowly recovering, the company's traditional categories such as zero-coating rice cookers and inverter wall breakers are driving domestic sales to stabilize, and new hair dryers are expected to contribute to the increase. Maintaining the profit forecast, the 2024-2026 EPS is expected to be 0.62/0.74/0.85 yuan, +22%/+15% year-on-year. Referring to the same industry, the company is given 23x PE in 2024, with a target price of 14.3 yuan, a “gain” rating.
Performance summary: The company's 2024Q1 revenue was 2,065 billion yuan (+9%), and the performance was 130 million yuan (+7.06%). The company's performance was in line with expectations.
The company's domestic sales slightly exceeded expectations, export sales were in line with expectations, and performance was in line with expectations. Looking at the breakdown of domestic and foreign sales, with reference to related transactions already disclosed by the company, 2024Q1 we expect the company's domestic sales to achieve double-digit growth, while export sales remain flat year over year. The company's domestic sales performance improved month-on-month. We expect that after more than a year of adjustments, the company's dealer inventory will be cleared, the sales performance of the shipping side and the retail side will be consistent, the superimposed air fry categories will stabilize, inverter wall breakers and zero-coating rice cookers will continue to gain strength, and the company's overall domestic sales will improve. At the performance level, 2024Q1's gross margin was -0.95pct yoy, and the net margin was -0.14pct yoy. The company's 2024Q1 sales, management, R&D and financial expenses ratio was +0.72, +0.24, -0.22, -0.64pct year-on-year. 2024Q1's other revenue of $0.18 billion (0.9% of revenue) was +015 million yuan (0.7% of revenue) year-on-year, mainly due to an increase in VAT deductions during the current period.
Looking ahead to 2024, the company's traditional categories such as zero-coating rice cookers and inverter wall breakers will stabilize domestic sales. New hair dryers are expected to contribute additional volume, and the company's performance is expected to achieve steady growth.
Risk warning: Increased market competition, risk of fluctuations in raw materials, and performance of new products falling short of expectations.