The operation continues to be under pressure, and the calculation of impairment is dragging down performance
Aojiahua released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 5.0 billion yuan (yoy -16.50%), net profit of 103 million yuan (yoy +1.16%), and deducted non-net profit of 307.745 million yuan (yoy -78.09%). Of these, 23Q4 achieved revenue of 1,279 billion yuan (yoy -3.71%) and net profit to mother of 8.0968 million yuan (yoy -75.88%). 24Q1 achieved revenue of 1,051 billion yuan (yoy -11.15%) and net profit of 4.969 million yuan (yoy -73.92%) to mother. Non-recurring gains and losses such as inventory impairment and exchange gains and losses drag down the company's performance. We expect the company's EPS for 2024-2026 to be 0.28, 0.33, and 0.41 yuan, respectively (previous values of 0.32 and 0.35 yuan for 2024-2025). Comparatively, the company's 2024 Wind unanimously expected the average PE value to be 25 times. The company continued to focus on its main business, increase its share of revenue, give the company 30 times PE in 2024, with a target price of 8.4 yuan (previous value of 8.96 yuan), and maintain a “buy” rating.
Business continues to be under pressure, and the company continues to focus on the main business to practice internal skills
The company's revenue in 2023 was -16.50% YoY. By product, massage chair revenue was 2.162 billion yuan, -13% YoY; small massage appliances had revenue of 1,539 million yuan, -21.21% YoY; and healthy environment revenue was 653 million yuan, -20.42% YoY. Facing continuous adjustment pressure from the external market, the company continues to focus on the core business of health and massage to enhance the competitiveness of its own brand business. In 2023, the company's own brands accounted for 51.46% of revenue, a slight increase over the previous year. 24Q1 The company's operations continued to be under pressure, and revenue was -11.15% year-on-year.
Gross margin was steady, moderate, and positive, with non-operating income leading to large profit fluctuations in the single quarter. The company's gross margin in 2023 was 37.07%, +4.84pct year on year; the sales expense ratio was 21.03%, up 2.68 pct year on year; and the gross sales margin was 16.04%, +2.16 pct year on year. As the company continues to adjust and optimize its business operation structure, business profitability has been restored. However, due to the company's accrued asset impairment losses of 84.29 million yuan and credit impairment losses in 2023, which were +143% and +147% year over year, respectively, the company's net profit margin to mother was only +0.36 pct year over year. The year-on-year decline in the company's non-operating income in 24Q1 resulted in a net profit margin of 1.14 pct year over year.
Risk warning: Demand for health and massage is declining, diversified business performance is weak, and RMB is appreciating.