24Q1 started well, with net profit to mother +47.15% year over year, maintaining the “buy” rating, Rattle released its quarterly report for the year 24. 24Q1 achieved revenue of 0.523 billion yuan (yoy +32.30%), net profit to mother 0.059 billion yuan (yoy +47.15%), deducting 0.053 billion yuan (yoy +54.48%) of non-net profit (yoy +54.48%). We judge that the main brands had a rapid increase in revenue and gross profit margin. It is due to driving profitability optimization. We maintain our profit forecast. The net profit due to mother for 2024-2026 is 0.278/0.333/0.396 billion yuan, respectively, and the corresponding EPS is 0.66/0.80/0.95 yuan, respectively. Comparatively, the company's 24-year Wind unanimously expected an average PE value of 14 times. Considering the outstanding resilience of smart toilet racetrack demand and the company's own brand business advantages, it maintained a target PE of 20 times in 24, maintained a target price of 13.20 yuan, and maintained a “buy” rating.
The independent brand business is expected to grow rapidly, and smart foundry is expected to grow steadily. In terms of traditional water parts demand, see: 1) In terms of independent brands, the company binds high-quality smart toilets, leading product quality, creating a matrix covering all products in light smart/mid/high-end, online+offline multi-channel efforts, increasing offline channel layout in 24 years, retail distribution/home appliance channels, etc. are expected to drive continued rapid growth in independent brand business revenue; 2) In terms of smart foundry, the company binds high-quality brand customers and is expected to accelerate the development of overseas OEM business in 24 years, which is expected to drive the development of overseas OEM business Foundry revenue is steady Growth; 3) In terms of water parts, the company's water parts business is dominated by high-end water-saving flushing components, leading the market share in the industry. Recovery in domestic and foreign customer demand is expected to drive revenue recovery in the water parts foundry business in 24 years.
The gross margin of 24Q1 sales increased by 5.01 pct, and the operating cash flow performance was steady. The gross sales margin of the 24Q1 company also increased by 5.01 pct to 30.24%. We judge that this was mainly due to the rapid growth of the company's own-brand business leading to business structure optimization and the resumption of overseas business with high gross margin. The cost ratio also increased by 2.57 pct to 19.45% during the 24q1 period, of which the sales expense ratio also increased by 5.84 pct to 11.66%. We determined that it was mainly due to the increase in marketing expenses under online+offline development for independent brands; the management+R&D cost ratio decreased by 1.60 pct to 8.61%, and the financial expenses ratio also decreased by 1.67 pct to -0.82%. We determined that it was mainly due to an increase in exchange income and interest income. In terms of cash flow. In 24Q1, the company's net operating cash flow also increased by 22.0% to 0.038 billion yuan, and the cash flow performance was steady.
A high-quality circuit for card smart toilets, and the gradual rise of domestic brands
In terms of product attributes, smart toilets have better consumption attributes than real estate properties. They are limited by fluctuations in the real estate cycle, and are in line with the trend of intelligence and consumption upgrading. They are an emerging dominant variety in the home circuit. According to data from Toubao Research Institute and Aowei Cloud Network, China's smart toilet market size was 15.69 billion yuan (yoy +7%) in '22, and the penetration rate was 17%/4% in terms of sales volume and ownership, respectively. There is considerable room for improvement in mature markets such as the US and Japan (60% + penetration rate). The company has built a cost-effective product matrix, strong online efforts, rapid offline layout, and obvious competitive advantages. It is optimistic that the company will gradually rise as a domestic brand.
Risk warning: Industry competition intensifies, demand falls short of expectations, raw material prices and exchange rates fluctuate.