Incident: The company released its annual report for the year 23 and the quarterly report for the year 24: in '23, the company achieved revenue/net profit/net profit deducted from non-net profit of 36.45/2.92/234 million yuan, +2.59%/+5.40%/+22.15% over the same period last year. 23Q4 achieved revenue/ net profit attributable to mothers/ net profit after deducting non-net profit of 1,098/1.26/124 million yuan, +3.17%/+11.81%/+30.52% year-on-year. 24Q1 achieved revenue/ net profit attributable to mothers/ net profit after deducting non-net profit of 641/0.36/ 014 million yuan, +11.45%/+11.16%/+8.24% year-on-year.

Retail sales are steady, wooden doors and overseas growth is impressive: by product, the company's overall kitchen cabinet/closet achieved revenue of 22.32/10.44/246 million yuan, respectively, -5.55%/+8.65%/+64.97% year-on-year; 24Q1 achieved revenue of 3.89/1.90/ 0.25 billion yuan, respectively, +7.63%/+19.91%/-14.88%.

By channel, in '23, the company achieved revenue of 18.81/0.96/12.76/274 billion yuan, +2.58%/-24.05%/-0.29%/+16.92%, respectively; 24Q1 achieved revenue of 2.86/0.05/2.34/ 0.81 billion yuan, respectively, -5.32%/-65.34%/+24.73%/+68.23%. In terms of retail, the company uses stores as a base to expand online, home improvement, bag, and retail segmentation tracks, and is also working on assembly channels. Revenue from home improvement and assembly channels has doubled in 23 years. On the general side, strategic cooperation has been signed with high-quality real estate companies to introduce categories such as wooden doors and kitchen appliances, and the 23-year growth has been resilient; overseas, differentiated business development models and delivery guarantee logic have been formulated in response to regional market differences, opening a new stage of international development.

Stable profitability: 23A/23Q4/24Q1 The company's gross profit margin was 29.58%/31.16%/28.01%, year-on-year change +0.12/-0.58/-1.11pct. By product, the gross margin of the company's overall kitchen cabinet/closet in '23 was 29.22%/29.70%/7.22%, -0.02/+0.53/+0.03pct. By channel, the company's distribution/direct operation/bulk/overseas gross margin in '23 was 35.40%/51.29%/15.41%/24.65%, -0.63/-18.00/+0.80/+4.70pct year-on-year. In terms of expenses, the company's sales/management/R&D/finance rates in '23 were 12.03%/4.67%/6.20%/-0.09%, respectively, -0.11/-0.03/+0.57/+0.13pct.

24Q1 The company's sales/management/R&D/finance rates were 13.29%/6.27%/5.34%/0.27%, respectively, -1.25/ -0.32/-0.47/+0.59pct. 23A/23Q4/24Q1 The company's net profit margin was 8.01%/11.45%/5.68%, a year-on-year change of +0.21/+0.88/ -0.01pct.

Looking ahead to 24 years, overseas business is expected to continue to expand: Overseas, the company explores efficient and risk-balanced business models for different markets, lays out overseas main production bases and territorial satellite factories to improve delivery efficiency and responsiveness, and is expected to continue to expand in the future. In terms of domestic sales, it is expected to grow steadily by developing new channels such as home improvement and bags, and adhering to the big household strategy.

Investment advice: The company continues to promote multi-channel and multi-business expansion. The company's net profit for 2024-2026 is expected to be 334/3.78/428 million yuan respectively, up 14.3%/13.3%/13.1%. The current stock price corresponds to PE at 10/8/7X, maintaining the “recommended” rating.

Risk warning: Terminal sales fall short of expectations; channel development falls short of expectations; real estate market fluctuations.