The company released 23A results
23A achieved revenue of 1,688 million yuan (+22% YoY), net profit to mother of 327 million yuan (+50% YoY), and deducted non-profit of 323 million yuan (+46% YoY) to achieve equity incentive targets. 23Q4 achieved revenue of 572 million yuan (+53% year over year), net profit to mother of 89 million yuan (+92% year over year), deducted non-profit of 94 million yuan (+110% year over year), and achieved a beautiful high growth due to low base+e-commerce combined efforts.
Industry beta: smart clothes dryer track growth continues
According to CSHIA Research, the market size of smart clothes dryers was 12.7 billion yuan in 23 years (+22.1% year over year), and the total number of sets reached 9 million units. The market size is expected to exceed 20 billion yuan by 2026, with an average increase of more than 20%. Furthermore, according to Roland Berger's research forecasts, the demand for a “new” clothes dryer is higher than the “new decoration” market, so it is relatively less disturbed by the new housing cycle. In terms of smart door locks, the omni-channel retail volume of smart household door locks in China reached 18.7 million sets in 2023, an increase of 3.6% over the previous year, and the smart door lock market is still maintaining a steady growth trend.
Channel side: Online+e-commerce are increasing
Offline: Total revenue of 23A South District+North District was 666 million (+26.5% YoY), of which: North District's revenue was 283 million (YoY +32.42%), Southern District's revenue was 382 million (YoY +22.51%), and gross margin of North District/Southern District increased by 6pct/4pct respectively. Accurate investment promotion in offline cities and divisions, regularly conveys the company's new products and technologies to dealers, and deeply empowers them.
E-commerce: 23A revenue of 1.06 billion yuan (YoY +19.38%), gross profit margin of 53.92% (+5.45pct year over year), growing steadily at Tmall and JD while rapidly deploying new platforms such as Douyin.
Project channel: It has reached cooperation with a number of central real estate companies and home improvement/property companies, and has great potential.
Category: Smart homes are growing rapidly
23A smart home products have revenue of 1,433 billion yuan (+26.39% year over year) and a gross profit margin of 53.1% (+4.8pct year over year). The Blue Whale power system for self-developed clothes dryers has been fully industrialized, continuously tackling technologies such as intelligent stroke adaptation, gesture sensing, and sunlight tracking and drying, and the product structure has been upgraded.
The revenue of 23A traditional clothes drying rack products was 215 million (+1.58% year over year, down 31.73% year on year 22), gross profit margin was 44% (+6.6pct year over year), product iterative updates accelerated and the decline stopped.
Financial Metrics
1) Gross margin & expense side: 23A gross margin was 51.35% (YoY +5pct); 23Q4 gross margin was 53.05% (+3.3pct YoY). The cost rate during the 23A period was 28.16% (+1.3 pct compared to the previous year). The main reason was to increase online and offline promotion efforts, and the management and R&D cost ratio decreased slightly.
2) Operating cash flow: 23A net operating cash flow was 504 million yuan (+287% year over year), Q4 was 179 million yuan (+122.33% year over year), mainly due to end-of-period payables of 295 million (+54% year over year) and inventory of 158 million yuan (-20% year over year), improving operating efficiency.
Profit forecasting and valuation
As a leader in smart drying, Mrs. Good has a clear position. We expect good growth in the future: the penetration rate of the smart drying industry still has a lot of room to improve, and demand for improvement in stock housing continues to be released. At the same time, the cost performance ratio of products is driving down the market, and the beta is better; in addition, the company actively lays out new categories such as smart security, and further expands its business line; on the channel side, it is a rare leading enterprise with offline retail, e-commerce, engineering, etc. in the industry; sets high equity incentive targets and is optimistic about stimulating system vitality and line vitality The results of the adjustments have led to the continued healthy growth of the company's performance. We expect the company to achieve operating income of 20.30/24.35/2,925 billion yuan in 2024-2026, a year-on-year increase of 20.25%/19.95%/20.10%, and net profit of 4.00/4.81/586 million yuan, up 22.26%/20.12%/21.91% year-on-year, corresponding to the current market capitalization PE of 15.26/12.71/10.42X, maintaining a “buy” rating.
Risk warning
Competition in the smart clothes dryer industry intensifies, and the real estate cycle is declining