Revenue has maintained a relatively rapid growth rate, and profits have been steady, moderate and positive. The company achieved revenue of 4.20 billion/ +24.6% in 2024Q1, net profit of 230 million/ +27.8%, net profit of non-return to mother of 220 million/ +33.2%. Driven by high export demand and ODM business expansion, the company's revenue continued to grow at a high rate, and profits increased slightly.
The refrigerator export boom continues to rise, and the company's refrigerator exports are expected to maintain a relatively rapid growth rate. According to data from the General Administration of Customs, the export value of 2024Q1 refrigerators in China (RMB caliber) increased by 33.2% year on year, and export volume increased by 34.4% year on year. Against the backdrop that demand for refrigerator exports remains high, the company's export orders and ODM orders have increased markedly, and export sales revenue is expected to continue the rapid growth trend. TCL's ice washing business in Hefei is growing or relatively steady.
Contract debt grew rapidly month-on-month, and it is expected to maintain a good growth trend in the future. The company's contract debt balance reached 370 million at the end of Q1, an increase of 25.1% over the end of 2023. It may indicate that demand for downstream exports is still strong, and the company's revenue is expected to maintain a good growth trend.
Overall profitability remained steady. The company's Q1 gross margin fell 1.9 pct to 20.3% year over year under the same caliber, or was mainly due to factors such as raw materials and shipping. The company continued to optimize the cost ratio. The Q1 sales/management/R&D/finance expense ratio was -0.2/-0.2/-1.0pct to 3.6%/2.9%/3.0%/-0.8%, respectively.
The company's net profit margin for the same caliber in Q1 was +0.1pct to 5.4% year-on-year, or mainly due to an increase in the share of the profitable refrigerator export business.
It is proposed to change the name “TCL Smart Home” to match the leading smart home software and hardware leader. The company plans to change its name to “TCL Smart Home” and add business scope such as household goods manufacturing, refrigeration and air conditioning equipment manufacturing and sales, smart home consumer equipment sales, and artificial intelligence industry application system integration services. It shows that after TCL joined Omar Electric, the strategic positioning of Omar Electric Appliances became more and more clear. Omar will become TCL's smart home appliance platform. It is expected to expand more home appliance categories in the future and move towards the world's leading smart home appliance company.
Risk warning: The recovery in overseas demand fell short of expectations, increased competition affected profitability, and exchange rates fluctuated greatly.
Investment advice: Maintain profit forecasts and maintain an “gain” rating.
The company is a leading refrigerator export OEM. It has remarkable operational efficiency and scale advantages, stable customer relationships, and promising collaboration with TCL's business. Maintaining the profit forecast, net profit for 2024-2026 is expected to be 88/98/1.10 billion, +11.6%/+11.3% YoY (without considering the impact of subsequent business acquisitions), corresponding to PE = 12/11/10X, maintaining the “gain” rating.