Investment events
Little Bear Electric released its 2023 annual report, with annual revenue of 4.71 billion yuan (+14.4% YoY), net profit of 450 million yuan (YoY +15.2%), net profit of 380 million yuan (YoY +5.6%); single Q4 revenue of 1.39 billion yuan (-1.8% YoY), net profit to mother of 130 million yuan (-11.1% YoY), net profit of 110 million yuan (YoY -8.2%).
Key points of investment
On the revenue side, the expansion of newly-needed categories has achieved remarkable results. Export sales have greatly increased the company's annual revenue by +14% year-on-year, including:
By category: 1) The rice cooker category expanded well, +20%; 2) Electric and pot categories were +18%, +13%; 3) Electric heating ratio -3%, which is expected to be mainly affected by early demand overdrafts; 4) Western-style appliances -17%; 5) New categories of household appliances and other small household appliances (personal care, mother and child, etc.) +23% and +68%, respectively.
By region and channel: 1) Domestic sales for the whole year were +10% year-on-year, leading the industry; 2) Export sales increased sharply, +106% year over year, accounting for an increase of 3.5 pct to 7.8%. 3) Online +10%, offline (including overseas) +41% YoY.
The overall Q4 industry was under pressure (Double 11 online -17%), and the revenue of a single Q4 company was -2% year-on-year, outperforming the market.
Fee control efficiency improved, Q4 net profit margin improved month-on-month
23 The company's net profit to mother for the whole year was +15% year-on-year, and the net profit margin to mother was 9.45% (+0.07pct year over year).
The Q4 Company's net profit to mother was -11% year-on-year, and the net profit margin to mother was 9.3% (-0.97pct, year-on-month improvement, +1.2pct). Single Q4 gross margin was -5.9pct year on year, -9.0pct month-on-month; the fee control effect was remarkable. The Q4 sales cost rate/management cost rate/R&D cost rate/financial cost ratio were -3.2/-1.1/-0.4/-0.2 pct year on month, respectively, and -7.1/-3.1/-1.2/-0.6 pct month-on-month, respectively.
Profit forecasting and valuation
The company's category expansion and overseas layout are gradually bearing fruit. We expect the company's net profit to be 506 million yuan, 5.81 million yuan, and 672 million yuan respectively in 24-26, +13.70%, +14.85%, and +15.53%, respectively. Corresponding to the current stock price PE is 18X/15X/13X, respectively, maintaining a “buy” rating.
Risk warning: Market competition intensifies; new product launch performance falls short of expectations, etc.