Incident review:
The company announced its results for the first quarter of 2024. 2024Q1 achieved revenue of 12.702 billion yuan, +10.61% year over year; realized net profit of 467 million yuan, -24.81% year over year; and realized net profit of 378 million yuan without return to mother, -21.92% year on year.
The revenue side achieved double-digit growth, and the sales growth rate may be faster than the sales growth rate:
The company's revenue has grown steadily, and the average shipping price increase may have made a strong contribution. In terms of domestic sales, Hisense showed greater resilience compared to the industry as a whole. According to Aowei Cloud Network data, 24Q1 TV sales volume was -5.3% and +12.6%. Hisense's overall domestic sales volume and value were -5.3% and +16%, and the premium capacity of leading brands increased. Looking at the breakdown, the 24Q1 Hisense TV online and offline sales volume was 740,000 units, respectively, -5.5% and -0.2% year-on-year respectively. The average online and offline prices were 3,458 and 7084 yuan respectively, +24.2% and +16.0% year-on-year respectively, driving online and offline sales +16.1% and 15.7% year-on-year respectively. In terms of export sales, with reference to data from the General Administration of Customs, the 2024Q1 TV export volume and value were +4.2% and 18.3% year-on-year respectively. Hisense's Q1 export data is expected to be positive.
The upside panel cycle affects short-term profitability:
Affected by the rise in panel prices, the company's 24Q1 gross profit margin was 15.76%, down 2.41 pcts year over year. The company's ability to control expenses is strong, and the cost rate for the period has been further optimized. The company's expenses rate for the 24Q1 period was 12.03%, -1.04pct year on year. Among them, sales expense rate/management cost rate/R&D expense ratio/financial expense ratio were -0.59/-0.22/-0.37/+0.14pct, respectively. Under the combined influence, the company's 24Q1 net profit margin was 3.67%, -1.74pct year-on-year.
Investment advice:
The company's equity incentives have been implemented, and the operating potential is strong. Major sporting events such as the Olympics and European Cup are approaching, and Hisense's multi-year layout in Europe is expected to enter a phased harvest period. We expect Hisense's global share to continue to increase. We expect the company to achieve operating income of 608.6/668.5/73.27 billion yuan in 24-26, an increase of 13.5%/9.8%/9.6%; achieve net profit of 24.2/27.8/3.18 billion yuan, up 15.4%/14.5% year-on-year, currently The corresponding PE price is 15/13/11 times, maintaining a “recommended” rating.
Risk warning:
Upstream prices such as panels fluctuated greatly, overseas demand fell short of expectations, and exchange rates fluctuated.