Introduction to this report:
The company turned a loss into a profit in 2023, and the year-on-year decline in 2024Q1 profit growth was affected by a certain high base. It is expected that with the gradual collaboration of categories such as wooden doors, wall panels, and cabinets, and the opening up of new businesses such as hotels and health care, the performance is expected to grow steadily.
Key points of investment:
Conclusion: The company's profit improved significantly in 2023, and the 2024Q1 performance growth rate was slightly pressured. Considering that there is still some uncertainty about downstream demand, the 2024-2025 EPS forecast was lowered to 2.47/2.82 yuan (originally 2.71/3.18 yuan), the 2026 EPS forecast was added to 3.26 yuan, and the target price was lowered to 32.11 yuan (previously 35.23 yuan) with reference to comparable company valuations, maintaining the “gain” rating.
Incident: The company's 2023 revenue was 3.738 billion yuan/ +16.49%, and net profit to mother was 390 million yuan/ +230.63%. 2023Q4 revenue was 1,033 million yuan/ +3.73%, and net profit attributable to mother was 99 million yuan/reversal of losses. 2024Q1 revenue was 626 million yuan/ -8.17%, and net profit attributable to mother was 29 million yuan/ -50.79%.
The 2023Q4 direct engineering channel has grown significantly. 2023Q4 dealer/direct engineering/engineering agent channel revenue was -5.64%/+15.08%/-28.03%, respectively, and -14.69%/+19.28%/-27.99% YoY revenue for plywood molded doors/solid wood composite doors/cabinets. The 2023Q4 reversal was mainly driven by rapid growth in revenue and gross margin for direct-run projects, as well as a significant narrowing of credit impairment losses. Channel revenue for 2024Q1 dealers/direct engineering/engineering agents was -23.74%/-36.64%/+45.14%, respectively, and +0.00%/-45.12%/-23.60% year-on-year revenue for molded doors/solid wood composite doors/cabinets. The year-on-year decline in 2024Q1 net profit had a high base impact, and other revenue declined 38.48% year over year (2023Q1 other revenue contributed 0.23 million yuan).
Distribution agents are diversified and are expected to grow steadily in 2024. On the product side, the company expanded from wooden doors to wall panel cabinets, and relied on category collaboration to increase penetration. The channel side has increased the development of new customers and the layout of non-housing businesses such as hotels/schools/health care. The net number of 2024Q1 franchised dealers increased by 7,992 to 4,4559, and it is expected that it will continue to accumulate rich customer resources and increase the company's share.
Risk warning: downstream demand recovery is slow; new category market expansion results are weak.