Description of the event
The company disclosed annual and quarterly reports: In 2023, the company achieved operating income of 4.84 billion yuan, a year-on-year increase of 12.39%, a year-on-year increase of 68.8%, non-net profit of 553 million yuan, an increase of 86.9%. Of these, the fourth quarter of 2023 achieved operating income of 1,332 billion yuan, an increase of 13.87% year-on-year, and net profit of 161 million yuan, an increase of 41.11% year-on-year, and a year-on-year increase of 164 million yuan. Meanwhile, in the first quarter of 2024, the company achieved operating income of 1,237 billion yuan, a year-on-year increase of 14.61%, net profit to mother of 125 million yuan, an increase of 37.38% year-on-year, and deducted non-net profit of 122 million yuan, an increase of 34.94% over the previous year.
Incident comments
Thanks to the high growth of new products such as smart home entry, the company's annual revenue scale grew by more than double digits, and quarterly revenue accelerated month-on-month.
The company achieved a 12.39% year-on-year increase in revenue in 2023. By category, smart home camera revenue in 2023 increased 2.99% year on year, smart home revenue increased 49.48% year on year, and other smart home revenue increased 52.19% year on year. Taken together, the company's smart home product revenue increased 10.09% year on year, mainly due to: on the one hand, the company continued to develop new overseas regions and customers, promote multi-channel coverage, and enrich the product matrix. On the other hand, the company actively expanded the smart home entry business and continued to increase the market Penetration rate and brand influence; IoT cloud platform revenue increased 27.79% year on year, of which C-side service revenue increased 17.65% year on year and B-side service revenue increased 40.07% year on year, mainly due to the company's continuous increase in the number of device connections and users and the continuous strengthening of platform capabilities and cloud service products. The number of connected devices increased 24.13% year on year in 2023, and the company's registered users increased 25.95% year on year; by region, the company's domestic revenue increased 8.14% year on year, and overseas revenue increased 24.79% year on year; points In terms of business model, the company's online revenue in 2023 increased by 22.52% year on year, and the company's offline revenue increased 9.94% year on year. The company's revenue for the fourth quarter of 2023 increased 13.87% year on year, revenue for the first quarter of 2024 increased 14.61% year on year, and quarterly revenue growth accelerated month-on-month.
The gross margin increased dramatically, and the operating expense ratio increased slightly, which collectively led to a significant increase in the company's annual operating profit margin. The company's gross margin in 2023 increased 6.44 percentage points year on year to 42.85%. Among them, the gross margin of the company's smart home cameras increased 7.62 percentage points year on year, the gross margin of smart home products increased 1.53 percentage points year on year, the gross margin of other smart home products decreased 2.41 percentage points year on year, gross margin of accessories products increased 4.59 percentage points year on year, and the gross margin of the Internet of Things platform business increased 3.66 percentage points year on year. The year-on-year increase in the company's smart home product gross margin mainly benefited from the company's lean supply chain management and reduced raw material costs Comprehensive factors such as an increase in the share of overseas business, channel structure and product structure optimization; at the regional level, the gross margin of the company's domestic business increased 6.19 percentage points year on year, and the gross margin of overseas business increased 6.92 percentage points year on year. The company's sales expense ratio increased 1.8 percentage points year on year, mainly due to the company's continuous channel expansion at home and abroad, and expenses related to sales activities increased; the management expense ratio decreased slightly by 0.09 percentage points year on year, and the R&D expenses rate increased 1.1 percentage points year on year. Combined, the company's operating profit in 2023 increased significantly by 81.95% year on year, corresponding to the company's 2023Q4 and 2024Q1 year-on-year increases of 57.66% and 20.52%, respectively.
Investment advice: The company actively promotes product innovation and channel optimization, and its profitability continues to increase. The company's net profit for 2024-2026 is expected to be 7.13, 8.50, and 1,007 billion yuan, respectively, corresponding to PE valuations of 35.91, 30.10, and 25.41 times, maintaining a “buy” rating.
Risk warning
1. The risk of falling market demand due to macroeconomic changes;
2. The risk of increased industry competition and increased market concentration.