Q1 Revenue and profit achieved steady growth. In 2024Q1, the company achieved revenue of 2.07 billion/+9.2%, net profit of 130 million/ +7.1%, net profit of non-return to mother 130 million/ +7.2%.

Q1 The small kitchen appliance industry is stabilizing, and demand for just needed categories is growing steadily. According to online monitoring data from Aowei Cloud Network, online retail sales of 2024Q1 small kitchen appliances fell slightly by 0.3% year on year, with an increase of 6.3% in March. Q1 Retail in the small kitchen appliances industry showed signs of stabilization and achieved marginal improvement in March. By category, retail demand for rice cookers, electric steamers, soy milk machines, etc. showed good growth. Q1 online retail sales were +5.3%/+6.8%/+30.8% year-on-year respectively. Joyoung's market share in categories such as rice cookers has increased. Domestic sales are expected to grow by nearly double digits, and revenue performance is improving positively.

Export sales are expected to grow steadily. According to the company's related transaction announcement, as of March 28, the amount of goods sold by the company to related parties in 2024 was 18.2 million US dollars. As of March 31, 2023, the data was $20.3 million. The company's export sales are expected to grow steadily, and domestic sales growth in Q1 will contribute even more.

Profitability fluctuations have narrowed, and net interest rates are expected to remain stable. The company's Q1 gross margin decreased by 0.9 pct to 26.9% year on year; the cost ratio control situation improved. The Q1 sales/management/R&D/finance ratio was +0.7/+0.2/-0.2/-0.6 pct to 13.2%/4.3%/4.2%/-1.1%, respectively, and the total cost ratio for the period was +0.1 pct. Q1 The company's losses such as credit impairment were reduced, and net profit margin fell 0.1 pct to 6.2% year on year, and profit performance was relatively steady.

Continuous product iterative upgrades, channel optimization and adjustment. The company continues to launch high-quality new products of small household appliances through innovation, focusing on high-end products such as the Space Series, leading the technological development direction of the industry, and launching innovative products such as zero-coated non-stick rice cookers and inverter light sound wall breakers. In the field of cleaning appliances, the company's products are gradually deploying a full range of anti-entanglement functions, and innovatively using crawler roller brushing and four-dimensional hot air quick drying technology. The company acquired Shenzhen Beetle Intelligence Co., Ltd. at the end of 2023, which is expected to enhance the company's competitiveness in fields such as sweeping robots and promote the development of the company's cleaning appliances. On the channel side, the company optimizes the channel layout, strengthens the construction of direct flagship stores online, enhances retail operation capabilities, and explores multi-channel operations such as content e-commerce; strengthens the construction of retail terminals and shopping guides offline, builds an O2O digital global marketing operation system, and comprehensively enhances retail marketing capabilities.

Risk warning: raw material prices fluctuate greatly; industry competition intensifies; new product sales fall short of expectations.

Investment advice: Maintain profit forecasts and maintain a “buy” rating.

Maintaining the profit forecast, the company's net profit for 2024-2026 is expected to be 48/55/ 620 million, up 24%/14%/12% year over year, corresponding PE is 20/17/15 times, maintaining a “buy” rating.