The company released the 2023 Annual Report & 2024 Quarterly Report: 1) 2023: The company achieved revenue of 3,738 million yuan (+16.5%), net profit of 390 million yuan (+230.6%), net profit of 339 million yuan (+190.6); of these, Q4 achieved revenue of 1,033 million yuan (+3.7% year over year), net profit to mother of 99 million yuan (+129.9% year over year), net profit of 87 million yuan (YoY +125.9%). 2) 2024Q1: The company achieved revenue of 626 million yuan (-8.2% YoY), net profit attributable to mother of 0.29 million yuan (YoY -50.8%), and net profit not attributable to mother of 0.19 million yuan (-50.0% YoY). The company adheres to platform empowerment, partnership and sharing, multi-wheel drive in distribution channels, engineering channels, foreign trade and export channels, and continues to be rich in integrated healthy home products such as categories, windows, wall panels, cabinets, flooring, bathroom, and hardware.
Agency engineering has increased, and distribution channels continue to expand. In 2023, the company's distribution channels/engineering channels/agency channels each achieved revenue of 980 million yuan/1.34 billion yuan/1.11 billion yuan (YoY +11.9%/+12.4%/+22.1%), and achieved gross profit margins of 24.2%/30.3%/17.8% (+2.5pct/+1.7pct/+1.0pct), respectively. 1) Project channel: National Guaranteed Building & Guaranteed Housing and Urban Village projects are progressing steadily. In addition, non-bonded building projects are being promoted to gradually achieve multi-category supply and steady revenue growth. 2) Agency channels: On the one hand, we are increasing our investment efforts, and the number of new agents continues to increase; on the other hand, we are gradually strengthening cooperation with non-real estate customers to develop incremental businesses such as hotels, schools, hospitals, etc., and continue to grow rapidly. 3) Distribution channels: Continue to explore the home improvement market and continue the downward trend of channels. The company has accelerated its channel decline. As of 2024Q1, the company has 4,4559 franchised dealers of various types (an increase of 7,992 over the end of 23), and is also vigorously promoting the development of the home improvement market based on the existing advantages of distribution and engineering channels. 4) Foreign trade: Achieved 94 million yuan in 2023 (+16.8% year over year). The company formed an external development team to continue to explore the Middle East, Southeast Asia, North America and other markets, and participate in domestic and overseas exhibitions.
Wooden doors are growing steadily, and new products are being released at an accelerated pace. In 2023, the company achieved revenue of 2.17 billion yuan/8.3 billion yuan/230 million yuan/300 million yuan/300 million yuan (+8.6%/+22.7%/+11.8%/+71.5%) respectively. The company's scale advantage is remarkable, and the wooden door business is growing steadily. Furthermore, it continues to expand into various categories such as windows, wall panels, cabinets, flooring, bathroom, hardware, etc., and revenue from other products continues to increase rapidly.
The profit performance in 23 years was impressive, and 24Q1 was under pressure in the short term. The gross margin of the 2023/2024Q1 company was 26.0%/18.8% (+2.2pct/-2.9pct year on year), respectively. The 24Q1 profit pressure was mainly due to a decline in the revenue side due to completion and an increase in the share of low-margin engineering channels. In 2023/2024Q1, the company's net interest rates were 10.4%/4.5% (+19.9pct/-3.7pct), and the 2023 sales/management/ R&D/finance expense ratios were 7.5%/2.6%/0.4% (YoY -1.9pct/-0.4pct/-0.5pct/+0.0pct); 24Q1 sales/management/R&D/finance expense ratios were 8.2%/2.9%/2.6%/0.4%, respectively (YoY + 1.0pct/+0.2pct/-0.8pct/-0.1pct).
Cash flow is steady, and channel optimization drives operational efficiency improvements. In 2023/2024Q1, the company generated net operating cash flow of 420 million yuan/-210 million yuan (-100 million yuan/-170 million yuan), 123 days of accounts receivable turnover as of the end of 24Q1 (+26 days year over year), 86 days of payables turnover (+6 days year over year), and 81 days of inventory turnover (-3 days year over year).
Profit forecast and investment rating: Net profit due to mother for 2024-2026 is estimated to be 450 million yuan/580 million yuan/580 million yuan, respectively. The corresponding PE is 9.0X/7.9X/7.0X, respectively, maintaining an “incremental” rating.
Risk warning: Real estate recovery falls short of expectations, Baojiao Building's progress falls short of expectations, and risk for real estate customers is rising.