Incident: Omar Electric announced its 2024 quarterly report. In the first quarter of 2024, the company achieved revenue of 4.20 billion yuan, YoY +24.6%; realized net profit attributable to mother of 230 million yuan, YoY +27.8%; realized net profit without deduction of 220 million yuan, YoY +33.3%. We believe that the export sales of Omar Refrigerators Q1 will continue to grow at a high rate, and that TCL's export sales in Hefei will accelerate.
Export sales of TCL ice washing accelerated in Q1: According to industry online data, Omar refrigerator 2024M1-2 export sales YoY +53%, and TCL refrigerator/washing machine 2024M1-2 export sales volume YoY +61%/+203%, respectively. The company's export sales of refrigerators and washing machines continued to increase. We think it is mainly because the company continues to benefit from the recovery in export sentiment. According to data from the General Administration of Customs, China's 2024M3 refrigerator sales have accumulated YoY +34%, and the export growth rate is still high. As a leading refrigerator export company, Omar Refrigerators, a subsidiary of the company, is expected to continue to benefit from the recovery in refrigerator exports, and the high increase in export sales of TCL Hefei refrigerators and washing machines is also expected to continue.
Q1 net margin remained stable year on year: According to the company announcement, Omar Electric's Q1 gross margin was 20.3%, -1.9 pct year on year. We determine that it is mainly due to changes in exchange rates and shipping costs, and adjustments in the export price of the company's refrigerators. Changes in raw material prices also have an impact on gross margin. The company's Q1 sales/management/R&D/finance expense ratios were -0.2/-0.5/-0.2/-1.0pct, respectively, and the company's overall cost rate control was further optimized. Q1 The financial expense ratio declined rapidly from year to year. We judge that it was mainly due to the company's large share of export revenue, and exchange gains and losses contributed to a certain extent.
Investment suggestions: 1) After the company changed its name to TCL Smart Home Appliance Company, it set a goal to grow in the direction of an AI smart home appliance enterprise, and there is room for long-term growth in multiple dimensions; we expect the company's EPS from 2024 to 2025 to be 0.80/0.93 yuan respectively, giving 15 xPE in 2024, corresponding to a target price of 12.00 yuan/share for 6 months. Maintain a Buy-A investment rating.
Risk warning: fluctuating raw material prices, mergers and acquisitions falling short of expectations, exchange rate fluctuations