The leading position is stable, and the dividend ratio continues to increase. Maintaining the “buy” rating company's 2023 annual report and 2024 quarterly report, the company achieved revenue/net profit of 112.02/17.33 billion yuan respectively in 2023, +9.06%/+10.20%, respectively; 24Q1 achieved revenue/net profit to mother of 2,237/398 million yuan, respectively, +2.49%. Affected by the slow recovery of real estate, we adjusted the company's 2024-2025 EPS forecast values to 2.04 yuan and 2.28 yuan (previous values: 2.38 yuan and 2.58 yuan), respectively, and introduced the 2026 EPS forecast value of 2.55 yuan. Comparatively, the company's 2024 Wind unanimously expected an average PE value of 14x. Considering the steady growth of the company's traditional categories, continued strength in emerging categories, and a stable leading position in the kitchen appliance industry, the company was given 15x PE in 2024, corresponding to a target price of 30.6 yuan (previous value of 30.9 yuan), maintaining a “buy” rating.
The traditional smoke stove business is still strong, and emerging categories are growing brilliantly
The company's revenue was +9.06% year over year, and the growth rate was higher than that of the industry (according to Aowei Cloud Network, the total retail sales volume of major domestic kitchen and bathroom appliances in 2023 was 166.9 billion yuan, +5.3% year over year). By product, the company's traditional smoke stove business is still strong. In '23, the online market share of the boss brand's smoke stove package was 32.86%, and the offline market share of range hoods/gas stoves was 30.97%/30.02%, respectively, ranking first. The company's revenue for range hoods/gas stoves was +10.13%/+8.71%, respectively, and the two accounted for 71.35% of total revenue; the company's washer/integrated products grew significantly, and the revenue of dishwashers/water heaters/integrated stoves was +27.94%/+21.17%/+20.58%, respectively.
The company's profitability improved in '23. Under 24Q1 cost pressure, the gross margin of the company's active fee control company in '23 was 50.65%, +0.67pct year-on-year. On the cost side, the cost rate for the 23-year period of the company was 32.77%, +0.84pct year on year; of these, the sales expense ratio was 26.80%, +1.36pct year over year, and sales expenses were +14.88% compared to the same period. The main reason was that the company increased promotion and marketing to launch new products. In '23, the company's R&D/finance expense ratios were -0.35/ -0.16pct, respectively, and the management expense ratio was basically the same year-on-year. The company's 24Q1 gross margin was 50.65%, -4.14pct year on year, mainly due to the increase in raw material prices compared to the same period last year. Under cost pressure, the company actively controlled expenses. The cost rate during the 24Q1 period was 31.8%, -4.82pct year on year; among them, sales/R&D/finance cost ratios were -4.16/ -0.04/-0.73pct year on year, respectively, and the management expense ratio was +0.11pct year over year. In the end, the company's net interest rates for the year 23 and 24Q1 were 15.31%/17.65%, respectively, +0.14pct/-0.12pct year-on-year, respectively.
The dividend ratio continues to increase, and the new round of incentive plans is expected to further motivate employees. On April 24, the company announced the “Shareholder Return Plan for the Next Three Years (2024-2026)”. It is planned that the dividend ratio for the next three years will continue to increase compared to 2023, and not less than 50%. In addition, the company launched a new round of incentive plans, and plans to grant 5.75 million share options to a total of 341 middle management and core technical staff at an exercise price of 18.92 yuan/share, which is expected to further enhance employee motivation.
Risk warning: Real estate market fluctuation risk; raw material price fluctuation risk; market competition increases risk.