The company has three core brands, covering different categories of small household appliances. The company has three core brands Levoit, Cosori, and Etekcity. Among them, Levoit focuses on environmental appliances, Cosori focuses on kitchen appliances, and Etekcity focuses on health and personal care, outdoor entertainment products, and personal care products.
The company achieved revenue of US$585 million in 2023, an increase of 19.4% over the previous year, and achieved net profit of US$77.48 million. In 2023, the company's gross margin was 46.9%, and the net profit margin was 13.2%.
The brand is getting stronger and the category continues to expand. In terms of product categories, the company has the highest market share in many categories. According to NPD data quoted in the company's annual report, the company's air purifiers and air humidifiers reached 28.6% and 22.7% in the US market share, all ranking first. According to the company's internal statistics, products such as weight scales, kitchen scales, fruit dryers, and electric kettles have the highest sales share in the US Amazon channel, which fully proves that the company has strong product strength and brand power. At the same time, the company continues to develop new categories of environmental household appliances such as tower fans and vacuum cleaners to further enrich the range of small household appliances.
Channel development and regional expansion contributed to growth. In terms of channel development, the company's Amazon channel revenue increased 11.2% in 2023, non-Amazon channel revenue increased 61.2%, and the share of non-Amazon channels increased to 22%. The company gradually entered more than 11,000 mainstream retailers in 2023, and the company was gradually favored by offline retailers due to its outstanding performance on Amazon in the early stages; in terms of regional expansion, the company's European market and Asian market grew by 16.5% and 83.4% respectively in 2023, accounting for 21.5% and 5.1% of revenue.
Profit forecasting and investment advice. The company focuses on the product side, and has gradually grown into a small household appliance company that has successfully gone overseas with domestic manufacturing advantages. It continues to expand categories and gradually expand non-Amazon channels. The company is expected to achieve steady growth through category expansion, channel development and regional expansion. We expect the company to achieve net profit of US$93.2 million, US$10.73 million, and US$128.71 million in 2024-2026, corresponding EPS of US$0.0811, US$0.0957, and US$0.1123, respectively. Based on the calculation of US$1 to HK$7.83, the company's 2024 EPS is HK$0.6352. Referring to comparable company valuation levels, the company is given a PE valuation of 15-18 times in 2024, with a corresponding reasonable value range of HK$9.53-11.43.
The first coverage gave it an “superior to the market” rating.
Risk warning. Demand for terminals fell short of expectations, and terminal brands were fiercely competitive.