E-commerce channels have performed well, waiting for an inflection point in business
Yitian Intelligence released its annual report. In 2023, it achieved revenue of 1,227 billion yuan (yoy -3.80%), net profit to mother of 179 million yuan (yoy -14.64%), and deducted non-net profit of 165 million yuan (yoy -6.00%). Among them, Q4 achieved revenue of 283 million yuan (yoy -9.56%, qoq -13.32%) and net profit to mother of 39.651 million yuan (yoy -91.87%, qoq -91.76%). The restoration of the new house is progressing slowly. We expect the company's EPS for 2024-2026 to be 1.97, 2.26, and 2.47 yuan, respectively (previous value 2.24 and 2.50 yuan for 2024-2025).
Comparatively, the company Wind agreed to expect an average PE value of 15 times. Considering the good performance of the company's e-commerce channel, the company was given 17 times PE in 2024, with a target of 33.49 yuan (previous value of 41 yuan) to maintain “increased holdings.”
E-commerce channels are growing, and the overall revenue decline is manageable
The company's revenue in 2023 was -3.80% YoY. By channel, e-commerce channel turnover (tax included) was 903 million yuan, +10.68% YoY. Due to the base effect, e-commerce channels grew rapidly in the second half of the year (23H1:
+3.54%); offline distribution channels are still under pressure. The company continues to explore new marketing ideas, deeply cultivate distribution channels, develop e-commerce channels, actively expand new retail businesses, and follow up on the sinking market.
Gross margin has been rising steadily. The increase in the management R&D expense ratio affected the company's gross profit margin of 48.66% in 2023, an increase of 2.04 pct over the previous year, due to cost dividends and channel structure optimization. The gross profit margin of direct channels in 2023 was 56.49%, up 4.24pct year-on-year. The sales expenses rate for the same period was 23.51%, an increase of nearly 1.2 pct over the previous year, due to increased investment in online marketing. Overall, an increase in gross margin can cover an increase in sales expenses. The significant year-on-year increase in management and R&D expenses was the main reason affecting 23Q4 and even the full year of 2023. In 2023, the company's management and R&D expenses rates were 6.15% and 5.21% respectively, increasing 2.43pct and 0.5pct respectively. Judging from the cost structure, the increase in depreciation expenses, share payments, and increased R&D investment after the fund-raising project was consolidated led to an increase in management and R&D cost rates. Ultimately, the company's net interest rate to mother was 14.59% in 2023, -1.85pct year over year.
The trade-in policy is expected to stabilize terminal consumption
According to Aowei Cloud Network's inspection, the retail sales volume and volume of integrated stoves in 24Q1 were 4.2 billion yuan and 450,000 units respectively, -11.9% and -10.5%, respectively. With the introduction of trade-in policy rules and companies' responses, trade-in is expected to boost demand for updates.
Risk warning: Increased market competition; unfavorable price fluctuations for raw materials, etc.; risk of new products falling short of expectations.