The company released its 2023 financial report
23Q4 achieved revenue of 720 million yuan, an increase of 30.0%, net profit attributable to mother of 0.2 billion, an increase of 113.5%, and net profit after deducting non-return to mother of 40 million yuan, an increase of 152.5%;
Revenue in '23 was $3.10 billion, up 16.5%; net profit attributable to mother was 210 million, up 625.2%; net profit not attributable to mother was 250 million yuan, up 78.6%.
The gross profit margin in '23 was 36.7%, up 5.1pct; the net profit margin was 6.6%, and the same increase was 5.7pct.
The company plans to pay a dividend of 353 million in '23, with a dividend ratio of 172%, corresponding to the current dividend rate of 8.4%.
Core customer supply agreements have been extended, and new customers are steadily expanding
In '23, revenue from smart electric beds was 2.52 billion, up 13.5%, with a gross profit margin of 35.7%, or 5.1 pcts; mattresses were 230 million, up 23.4%, gross profit margin 46.6%, and 8.6pct; accessories and other revenue was 239 million, with a gross profit margin of 43.3%, or 16.7 pcts.
Cooperation with the company's major customers is stable. At the beginning of '24, the company extended the electric bed product manufacturing and supply agreement with TSI until March 31, 2027, and renewed the five-year electric bed product manufacturing and supply agreement with SSB, which is conducive to continuing to maintain its advantage in the North American market;
In addition, the company is actively expanding the number of new customers, and the North American market is seeking cooperation with more furniture retailers; the European market entered and gradually penetrated the bedding market by cooperating with large mattress companies, and orders from European customers have clearly picked up in '23.
Expanding domestic stores and speeding up brand building
Overseas revenue in '23 was 2.77 billion yuan, up 15.5%; gross profit margin was 35.8%, up 5.5 pct; domestic revenue was 220 million yuan, up 55.1%; gross profit margin was 54.5%, up 11.5 pct.
In '23, the revenue growth of “Schuford” in China was impressive, with a total of 109 stores being opened; in '24, the company will continue to rely on store expansion and enter more large, medium and small furniture fairs to popularize the company's products, expand potential consumer groups, and raise consumers' awareness of the brand.
Global layout of production capacity to ensure supply chain security
1) Domestic: The second phase of the company's R&D center and production support plant project was officially completed in '23, and the overall building decoration and internal production line layout of the factory area will continue to be promoted for 24 years. After completion, it will form a data service center with an annual output of 1 million sets of sensors and 2.4 watts of electric beds; 2) Vietnam's design production capacity is about 600,000 sheets, and production is currently basically maintained at full capacity; in January '24, Qisheng Vietnam's Pingfu factory officially started construction (area of 910,000 square meters, total investment of about 20 million US dollars), and it is expected that the entire process can produce 80,000 smart beds every month;
3) Mexico's design production capacity is about 500,000 sheets, and production capacity still has room to climb.
Adjust profit forecasts to maintain “gain” rating
The company focuses on smart electric bed tracks and is committed to increasing overseas market share. Domestic independent brand building is progressing steadily. Based on our 23-year performance, we adjusted our profit forecast. We expect net profit to be 2.7/33/380 million yuan for 2024-26 (269/315 million yuan respectively) for 2024-26, respectively, and the corresponding PE is 16/13/11X, respectively.
Risk warning: decline in overseas demand; exchange rate fluctuations; changes in raw material prices; decline in core customer share, etc.