Incident Overview
The company released its annual report for 2023 and quarterly report for 2014:
Year 23: Total operating income of 6.233 billion yuan (YOY +7.12%), net profit to mother of 447 million yuan (YOY +212.50%), net profit after deducting 412 million yuan (YOY +362.75%).
23Q4: Total operating income of 1,802 million yuan (YOY +15.54%), net profit of 88 million yuan (YOY -163.64%), net profit after deduction of 66 million yuan (YOY -137.95%).
24Q1: Total operating income of 1,381 billion yuan (YOY +15.60%), net profit to mother of 124 million yuan (YOY +34.61%), net profit after deduction of 122 million yuan (YOY +50.73%).
Analytical judgment
Revenue side: Split channels, online is better than offline, and there are delays in engineering and overseas. The revenue growth rate of online/offline/engineering/overseas channels in '23 was 23%/11%/-20%/-20%, respectively. Among them, new retail sales from offline channels achieved revenue of 965 million yuan, an increase of 58.6% over the previous year. We judge that offline distribution has declined. By splitting products, revenue from traditional products in '23 was +22%/+6%/-6% year-on-year, and sales volume was +10%/+3%/-7% year-on-year, respectively. Revenue growth was contributed by volume and price. Q1 Revenue accelerated to 16%. We believe overseas and engineering delays will ease in 24, and the company's revenue is expected to accelerate.
Profit side: Revenue scale increased, channel structure optimization led to an increase in gross margin. Asset impairment losses and credit impairment losses decreased by 135 million yuan compared to the same period last year. The net interest rate improvement was higher than gross profit margin under the combined influence.
In '23, the company achieved gross sales margin of 42.18% (YOY+2.66pct), net profit margin 7.17% (YOY+4.72pct); corresponding Q4 gross sales margin of 43.14% (YOY+8.29pct), and 4.86% net profit margin (YOY+13.68pct). The company's sales/management/R&D expenses in '23 were 24.74%/4.54%/3.97%, respectively, +0.39pct/+0.18pct/ -0.48pct; corresponding Q4 was 26.56%/4.25%/4.03%, respectively, and +5.86pct/-0.68pct/+0.50pct, respectively.
24Q1 earnings continued to improve. 24Q1 gross profit margin of 41.86%
(YOY+2.23pct), net profit margin 8.98% (YOY+1.27pct). Sales/management/ R&D expenses were 24.06%/4.67%/4.65%, respectively, and +1.89pct/-1.01pct/-0.48pct, year-on-year, respectively.
Investment advice
Based on the annual report information, we maintain the company's revenue forecast for 24-25, adding 70.37/77.08/8.441 billion yuan for 26 years, +12.91%/+9.54%/+9.50% year-on-year, respectively.
In terms of gross margin, it is estimated to be 43.18%/43.68%/43.68% for 24-26, respectively. Net profit corresponding to the mother for 24-26 was 641/735/829 million yuan, respectively (previous value was 562/638 million yuan in 24-25), year-on-year difference
+43.27%/+14.75%/+12.72%. The corresponding EPS was 0.76/0.87/0.98 yuan (previous value was 0.66/0.7 yuan in 24-25). Based on the closing price of 7.00 yuan on April 26, 24, the corresponding PE was 9.26/8.07/7.16 times, respectively, maintaining the “gain” rating.
Risk warning
Post-epidemic consumption recovery falls short of expected risks; raw material price increases risk; new product sales fall short of expectations.