Incidents:
The company released its 2023 annual report: In 2023, the company achieved revenue of 3,902 billion yuan, an increase of 21.61%; the company achieved net profit attributable to mother/withheld from mother in 2023 of 634/255 million yuan, an increase of 189.72%/142.38%, respectively. Among them, in the fourth quarter, the company achieved revenue of 1,216 billion yuan, an increase of 35.73% over the previous year, and realized net profit of 117 million yuan to mother, an increase of 93.55% over the previous year.
H2 growth accelerates, and warehousing logistics maintains a high growth rate
In 2023, Q1-Q4 companies achieved revenue of 7.96/8.82/10.07/1,216 billion yuan respectively, up 4.29%/12.34%/31.90%/35.73% year-on-year respectively. In terms of growth drivers, the company's revenue for ergonomic products/warehousing and logistics services in 2023 was 26.12/951 million yuan, up 8.70%/94.03% year-on-year respectively, contributing 30.1%/66.5% of total revenue growth respectively.
Profitability increased year-on-year, and rates remained stable during the period
In terms of profitability, the company's gross margin/net profit margin in 2023 was 36.53%/16.24%, up 2.12/9.42pct, respectively. Among them, the gross profit margin of ergonomic products for the full year of 2023 was 42.65%, up 3.92 pct year on year. The increase in net interest rate was mainly due to annual asset disposal revenue of 516 million yuan (66 million yuan for the same period in 2022). In terms of period expenses, the company's sales/management/finance rate in 2023 was 20.07%/4.18%/0.96%, with year-on-year increases and decreases of -0.09/+0.47/+0.05pcts, respectively. The change in financial rate was mainly due to an increase in interest expenses on leasing liabilities. The company's R&D rate during the same period was 3.71%, a year-on-year decrease of 0.77pct, which is basically the same as the same period last year.
Ergonomic brands have a high market share, and overseas warehouses are expanding rapidly
In terms of core categories, the company continues to develop its own brand. As of 2023, the domestic brand “Loctek” lift table continued to have the highest market share on Tmall and Jingdong platforms, and the overseas brand “FlexiSpot” lift table ranked first in sales in e-commerce platforms such as Amazon, Home Depot, Walmart, Lotte, and Yahoo. Overseas warehouses. By the end of 2023, the company had 12 self-operated overseas warehouses around the world, with an area of 289,600 square meters. Expansion was accelerated in the first quarter of 2024. Currently, it has 13 self-operated overseas warehouses worldwide, with a total area of 362,400 square meters.
Investment advice and profit forecasting
The company is a leader in the ergonomics industry. It has become a new growth pole while expanding overseas warehouse business with linear drive as the basic market. We expect the company to achieve revenue of 49.19/60.84/7.193 billion yuan in 2024-2026, net profit to mother of 4.51/5.20/593 million yuan, EPS of 1.44/1.66/1.90 yuan/share, corresponding PE of 13.46/11.68/10.24 times, maintaining a “buy” rating.
Risk warning
Risk of sea freight prices exceeding expectations; risk of new product sales falling short of expectations; risk of exchange rate fluctuations exceeding expectations