Incident: The company announced its 23rd annual report, with revenue of 17.507 billion yuan +22.85% YoY, net profit of 16.15 billion yuan +41.22% YoY after deducting non-return to mother, +71.88% YoY, gross profit margin of 43.54% yoy +4.82pcts, net profit margin 9.68% yoy +1.37pcts. Our review is as follows:
Revenue returned to rapid growth in '23, and profitability improved markedly. The company's revenue for 23 years was 17.507 billion yuan +22.85% YoY, net profit of 1,615 billion yuan +41.22% YoY after deducting non-return to mother, +71.88% YoY, gross profit margin of 43.54% yoy +4.82pcts, and net profit margin 9.68% yoy +1.37pcts.
The return to rapid revenue growth in 23 years was mainly due to a certain recovery in demand, as well as the company's iteration of new products and continuous deepening channel construction; efficiency improvements and cost reduction led to significant improvements in profitability. The company plans to pay a cash dividend of 20 yuan for every 10 shares, while using the capital reserve to increase 3 shares for every 10 shares. The overall performance of Q4 was in line with expectations, achieving revenue of 5.721 billion yuan +21.36% month-on-month, net profit of 402 million yuan +28.31% month-on-month +2.14%, net profit margin of 44.04% yoy +5.60pcts month-on-month +0.57pcts, net profit margin of 7.74% yoy +0.66pcts month-on-month.
All three product lines achieved rapid growth in '23, and new products such as energy storage and security grew at an accelerated pace. View by product:
1) Charging energy storage: revenue of 8.604 billion yuan +25.12%, gross profit margin of 42.26% yoy +0.40pct. Revenue growth was mainly due to the rapid growth of core digital charging products as downstream demand picked up and the company's new product launch, and consumer-grade energy storage products also grew rapidly; 2) Intelligent innovation: revenue of 4,541 billion yuan +18.72% yoy, gross profit margin of 46.50% yoy +9.73 pcts, mainly benefiting from the rapid development of new product lines for household security products; 3) Smart Video: revenue of 4.285 billion yuan +2,647 million yoy %, gross profit margin of 43.52% year over year +7.81 pcts, mainly benefiting from contributions from wireless audio products.
Other third-party platforms and independent sites are developing rapidly, and overseas markets continue to develop rapidly. Sub-channels:
Online revenue of 12.307 billion yuan +30.19% year on year, gross profit margin of 46.39% year on year +3.16 pcts. Among them, Amazon platform revenue still achieved rapid growth of 25.37%. At the same time, other third-party platforms and six independent sites performed well, with revenue growth rates of 32.81% and 83.87% respectively; offline revenue of 5.20 billion yuan +8.40% year over year, gross profit margin of 36.78% year over year. By region: Overseas revenue of 16.869 billion yuan +22.87% year-on-year, with a gross profit margin of 43.84% yoy +5.00pcts. Companies in mature markets such as North America/Europe/Japan still achieved upward growth through new product expansion and channel deepening. Among them, Europe/Japan market revenue grew by more than 30% year on year, and potential markets such as the Middle East/Mainland China/other regions also performed well.
Looking ahead to the future, I am optimistic that the expansion of categories such as energy storage and security and the deepening of channels will open up new growth space. In the charging energy storage sector, the company is expected to consolidate its leading position in the digital charging field and continue the growth trend; in terms of energy storage, we are optimistic that the company will open up new growth space for the charging business based on its long-term accumulation of small to medium charging products and its channel advantages in overseas regions such as North America and competitiveness in terms of brands, technology, and products. In the intelligent innovation sector, the company's security products are competitive in overseas markets, and there is still plenty of room for development. In the smart video sector, the company's audio products continue to innovate, and the brand's influence continues to increase, and it is expected to grow upward.
Investment proposal: The company is deeply involved in the field of charging and laying out new energy storage tracks, while actively expanding smart homes, wireless audio and other fields. The channel side continues to deepen, forming a three-dimensional layout online, offline, and multiple regions.
Our latest forecast is 24-26 operating income of 202.21/236.79/27.775 billion yuan, and net profit to mother of 19.11/22.49/2,617 billion yuan, corresponding to 17.2/14.6/12.5 times PE. We are optimistic that the company will continue to open up the company's growth ceiling through product-side category expansion and channel-side deepening layout. Maintain an “overweight” investment rating.
Risk warning: Trade frictions increase risks, industry changes and product iteration risks, online B2C model risks, concentrated procurement risks of cell raw materials, and increased market competition risks.