Incident: The company released its annual report. In 2023, it achieved revenue of 3.103 billion yuan, +16.5% year-on-year, and realized net profit of 206 million yuan, +625.2% year-on-year, after deducting non-return net profit of 255 million yuan, +78.6% year-on-year.
The company plans to distribute a cash dividend of 10.00 yuan (tax included) to all shareholders for every 10 shares, for a total of 350 million yuan (tax included), accounting for 171.63% of net profit due to mother in 2023.
The gross margin of core products has been significantly restored. By product, smart electric bed revenue in 2023 was 2.52 billion yuan, +13.5% YoY, +5.1pct; mattress revenue was 230 million yuan, +23.4% YoY, gross profit margin 46.6%, +8.6pct yoy, accessories and other revenue was 240 million yuan, YoY +79.7%, gross profit margin 43.3%, YoY +16.7pct.
Major customer supply agreements have been renewed, and partnerships are stable. Overseas revenue in 2023 was 2.77 billion yuan, +15.5% year on year, gross profit margin 35.8%, +5.5 pct year on year. At the beginning of 2024, the company and TSI extended the manufacturing and supply agreement for electric bed products until March 31, 2027, and renewed the five-year electric bed product manufacturing and supply agreement with SSB. The company cooperated steadily with major customers and maintained its dominant position in the North American market.
The domestic market is gradually being cultivated. The domestic independent brand “Schuford” made a breakthrough. The first store was opened in Beijing in April 23. The monthly sales volume of a single store exceeded one million, and a total of 109 “Schuford” stores were opened throughout the year. Domestic revenue in 2023 was 220 million yuan, +55.1% year on year, gross profit margin 54.5%, +11.5pct year on year.
Production capacity is expanding steadily. In December 2023, the R&D center and production support plant project (Phase II) of the company headquarters came to an end, forming a data center service with an annual output of 1 million sets of sensors and 24,000 electric beds.
In January 2024, Qisheng Vietnam officially started construction at its Binh Phuc plant, with a total investment of about 20 million US dollars, which can produce 80,000 smart beds throughout the process every month. After the Vietnam factory is completed, it will help the company establish a global supply chain system, optimize the supply chain and increase customer stickiness.
Profit forecast and rating: We are optimistic that the company is deeply tied to major customers, and the export sales market continues to grow; actively expanding the domestic marketing network and adding brand effects, the domestic sales situation is expected to gradually open up. The company's net profit to mother is estimated to be 250 million yuan, 280 million yuan, and 310 million yuan in 2024-2026. The corresponding PE is 17x/15x/14x respectively, maintaining the “recommended” rating.
Risk warning: Profit distribution plans need to be submitted to the shareholders' meeting for review and approval before they can be implemented; overseas demand falls short of expectations, raw material prices fluctuate, industry competition intensifies, etc.