Incident Overview
Mrs. Hao released the 2023 annual report: in '23, the company achieved revenue of 1.69 billion yuan, net profit to mother of 330 million yuan, +49.7% year on year, net profit after deducting 320 million yuan, +46.2% year on year; in a single quarter, the company achieved revenue of 570 million yuan, +53.1% year over year, net profit to mother of 90 million yuan, +92.1% year on year after year. In terms of cash flow, the company's net operating cash flow in 2023 was 500 million yuan, an increase of 2.9 times over the previous year. This is mainly due to an increase in cash received from sales of goods and provision of services during the reporting period compared to the previous period, and a decrease in cash from purchasing goods and receiving labor payments compared to the previous period. In addition, the company plans to distribute a cash dividend of 3 yuan for every 10 shares to all shareholders, for a total of 120 million yuan in cash dividends.
Analytical judgment:
The share of smart homes has further increased. Looking at online and offline dual-driven development products, the company's smart home products, clothes rack products, and other products achieved revenue of 14.33, 2.16, and 0.24 million yuan respectively in '23, +26.39%, +1.58%, and +1.73% year-on-year respectively. Contributing revenue ratios were 84.86%, 12.77%, and 1.4%, respectively. Benefiting from continuous iterative innovation in the main smart drying products, smart home products contributed further to the revenue ratio. By channel, the company implemented online and offline dual-drive development in '23. In '23, the company achieved revenue of 10.06 billion yuan and 666 million yuan respectively, +13.71% and +37.51% year-on-year respectively. In addition to maintaining the steady growth of existing platforms through global integration, the company rapidly laid out new e-commerce sales platforms, and e-commerce channel revenue increased 19.38% year-on-year in '23. In '23, the company accelerated channel sinking, deepened the layout of new channels such as hardware stores, new retail, and KA, introduced multi-level full-chain store management standards, strengthened accurate matching of “people and stores”, improved the quality of terminal retail operations, continuously consolidated its offline channel advantages, and benefited from its various initiatives and rapid growth in the previous 23 years. On the online side, the company continues to maintain the steady growth of leading e-commerce platforms such as Tmall and Jingdong, and has accelerated the deployment of new platforms such as Douyin, focusing on cultivating new categories. E-commerce has been leading the industry in sales for 23 consecutive years, and has won many awards such as the platform and the best service in the industry.
Profitability continued to increase, and the cost rate increased slightly during the period
In terms of profitability, the company's gross profit margin and net profit margin in 2023 were 51.35% and 19.36%, respectively, +4.99pct and +3.55pct year on year; of these, the Q4 single quarter gross profit margin and net interest rate were 53.05% and 15.52% respectively, +3.30pct and +3.15pct, respectively. By product, the gross margins of the company's main products, smart home products and clothes drying rack products, were +4.84pct, +6.62pct to 53.10% and 44.04%, respectively. The gross margin was a contribution to the optimization of the company's product structure and the increase in gross margin of the main products. The increase in net interest rate increased slightly compared to the cost ratio during the period when gross margin was small. In terms of period expenses, the company's expenses rate for the 2023 period was 28.16%, +1.30pct. Among them, the sales/management/R&D/finance expenses rates were 20.33%/5.17%/3.15%/-0.48%, respectively, and +1.66pct/-0.39pct/-0.02pct/+0.05pct, respectively; the increase in sales expenses was mainly due to the increase in offline channels and e-commerce platform promotion efforts during the reporting period.
Investment advice
The company's clothes drying rack products continue to be upgraded, and changes in retail channels have enhanced the company's ability to control terminals. E-commerce channels continue to develop rapidly, and large-scale engineering channels are actively expanding. In addition, other new categories such as smart door locks are poised to launch. We adjusted our previous revenue forecasts. The company's revenue for 24 and 25 was adjusted from 20.51 billion yuan and 2,465 billion yuan respectively. The estimated revenue for 26 was 2,823 billion yuan, and the EPS forecast for 24 and 25 was adjusted from 0.92 and 1.08 yuan to 0.98 and 1.14 yuan respectively. The estimated EPS for 26 was 1.33 yuan, corresponding to the closing price of 14.34 yuan/share on April 24, 2024, PE was 16/13/11 times, respectively, taking into account the intelligence of the company The home circuit is expected to fully benefit from the rapid development of the home circuit and maintain its “buy” rating.
Risk warning
Risk of fluctuations in the real estate industry; risk of large fluctuations in prices of major raw materials; sales of smart door locks falling short of expectations; risk of the dealer model; in December 2019, Zhou Qiuying received a decision on administrative supervision measures from the Guangzhou Securities Regulatory Bureau due to the timely appointment of a company that violated credit disclosure regulations.