Incident: Q1 achieved operating income of 23.486 billion yuan, +20.87% year over year; realized net profit of 981 million yuan, +59.48% year over year; realized net profit of 838 million yuan after deduction, +60.89% year over year.
Comment:
Q1 Revenue increased significantly, and the overseas contribution of ice washing increased.
Air conditioning: According to industry online data, the domestic and foreign sales schedule for Hisense Q1 household air conditioners is +12% compared with the 23-year performance. In terms of central air conditioning business, according to industry online data, in January-January, China's domestic and foreign sales of central air conditioning were +22% and +53%, respectively. We expect the company's export performance to be superior to domestic sales.
Ice washing business: According to data from the General Administration of Customs, the export value of China's refrigerators and washing machines in Q1 was +26% and +22%, respectively. We believe that as the leading ice washing brand, Hisense's export volume and average price performance may all be superior to the industry average.
Sanden: We expect a slight increase in revenue from the Sanden business in Q1.
Exchange earnings reduced financial expenses, and profitability improved year over year.
Q1 The company achieved a gross sales margin of 21.63%, +0.51 pct year-on-year. From an expense ratio perspective, Q1 company's sales, management, R&D, and financial expense ratios were -0.09pct, -0.01pct, +0.22pct, respectively. Q1 financial expenses decreased by 54.632 million yuan, mainly due to increased exchange earnings; Q1's other revenue was 151 million yuan, +90% year-on-year, mainly due to an increase in VAT deductions. Benefiting from cost control, reduced financial expenses, and other revenue increases, in Q1, the company achieved a net profit margin of 4.18% to mother, +1.01pct compared to the previous year.
Accounts receivable financing increased, and net cash flow from operating activities declined drastically.
1) The company's monetary capital and transactional financial assets at the end of the 24Q1 period totaled RMB 18.139 billion, +0.04%; total end-of-period accounts receivable and notes amounted to RMB 11.28 billion, +13.17% compared to the beginning of the period; 24Q1 year-end accounts receivable financing amounted to RMB 6.875 billion, +48.06% at the beginning of the period, mainly due to the increase in the size of the Q1 company; total end-of-period inventory of RMB 7.185 billion, compared to the beginning of the 24Q1 period, +6.06% compared to the beginning of the period; total contract liabilities at the end of the 24Q1 period amounted to RMB 15.10 billion, compared to the beginning of the period +4.88 billion yuan%.
2) The net cash flow from operating activities in 24Q1 was 156 million yuan, compared to -82.40% year on year in 23Q1. We believe that the main reason may be that the company produced and prepared goods for Q2, which led to a marked increase in cash for purchasing goods and receiving labor payments in 24Q1.
Profit forecast: We expect the company to achieve operating income of 980.88/1094.61 118.940 billion yuan in 24-26, +14.6%/+8.7%, respectively, and net profit to mother of 35.45/40.744.76 billion yuan, +24.9%/+14.8%/+10.0% year-on-year, respectively, corresponding to PE13.69/11.92/10.84x.
Risk factors: large fluctuations in raw material costs, consumer demand recovery falling short of expectations, overseas market expansion falling short of expectations, etc.