Event: The company released its 2023 annual report and 2024 quarterly report. The company achieved operating income of 14.647 billion yuan in 2023, an increase of 6.94% over the previous year, and realized net profit of 977 million yuan, an increase of 1.64% over the previous year. Among them, the company achieved operating income of 3.892 billion yuan in 2023Q4, an increase of 30.66% over the previous year, and realized net profit of 241 million yuan, an increase of 105.07% over the previous year. The company achieved operating income of 3.474 billion yuan in 2024Q1, an increase of 22.79% over the previous year; net profit to mother was 173 million yuan, an increase of 24.74% over the previous year.
There was a high increase in export sales revenue. By product, household appliances performed well. In 2023, the company's kitchen appliances/household appliances/other products/other businesses achieved revenue of 98.98/24.90/19.41/319 billion yuan respectively, +4.08%/+20.41%/+3.14%/+34.14% over the same period last year. By region, there has been a high increase in export sales revenue.
In 2023, the company achieved overseas and domestic revenue of 108.11/38.36 billion yuan respectively, +11.08%/-3.22%; 2024Q1 achieved revenue of 2,568/907 million yuan respectively, +30%/+7% year-on-year. We judge that the 2024Q2 export boom is expected to continue. Looking at the model, in 2023, the company's ODM & OEM/independent brand achieved revenue of 119.42/2.705 billion yuan respectively, +10.42%/-6.11% compared with the same period last year, putting pressure on the independent brand business.
The level of profit is steady. 1) Gross profit margin: 2023Q4/2024Q1 The company's gross margin changed year-on-year - 0.48pct/0.03pct to 23.39%/21.92%, and the gross margin was relatively stable. 2) Rate side: The 2024Q1 sales/management/R&D/finance rate was 3.97%/5.49%/3.80%/-0.93%. The year-on-year change was -0.29pct/-0.78pct/-0.3pct/-2pct, and the cost management capacity was strong. Among them, the large change in financial rate was mainly due to an increase in exchange earnings (2024Q1 exchange earnings increased by 79 million yuan over last year).
3) Net interest rate: Overall, the company's 2023Q4/2024Q1 net interest rate changed 2.09pct/0.07pct year-on-year to 6.98%/5.54%.
Category expansion opens up a new growth curve. During the reporting period, the company's business further expanded from small kitchen appliances to cleaning appliances. The newly launched pool cleaning robot can automatically clean pool walls and floors through a mobile app in real time, and is currently sold in Europe and the US. Furthermore, by participating in the Canton Fair in April 2024, the company successfully attracted buyers from France, Spain, the United States, Australia and other countries and obtained order intentions.
Profit forecasting and investment advice. We expect net profit attributable to mother for 2024-2026 to be $1,106/12.74/1,470 billion, respectively, up 13.2%/15.2%/15.4%, maintaining the “buy” rating.
Risk warning: risk of raw material price fluctuations, channel expansion falling short of expectations, risk of exchange rate fluctuations.