The company's revenue in 2023 was 21.304 billion yuan, up 5.62% year-on-year. 23Q1/23Q2/23Q3/23Q4/24Q1 revenue was 49.63/50.20/53.84/59.37/5.37/5.378 billion yuan, respectively, with year-on-year changes of -11.56/+6.53/+15.63/+14.40/ +8.38%, respectively.

By industry, the revenue of cookware/appliances in 2023 was 60.56/14.963 billion yuan, a year-on-year change of -1.07/ +8.40%, respectively. Cookware/appliance sales increased 7.45/ 9.46% year over year in 2023, respectively. The average sales price of cookware dropped significantly, and the average sales price of electrical appliances remained flat. In 2023, the operating cost of cookware/appliances increased by 1.01%/6.24% year on year, and the average procurement cost of cookware increased slightly.

By product, revenue from cooking appliances/food cooking appliances/cookware and utensils/other household appliances in 2023 was 88.92/34.84/60.56/2,871 billion yuan respectively, with year-on-year changes of +4.53/+12.87/-1.07/ +16.94%, respectively. ① In the field of open flame cookware, according to data from Aowei Cloud Network, the online market share of Supor cookware increased by 24% year-on-year in 2023, leading the second brand by more than 4 times; the overall offline market share was nearly 50%, ranking first; categories related to health concepts such as pressure cookers, casseroles, steamers, etc. performed well, and cookware made of healthy materials such as stainless steel 316L and titanium was more popular among consumers. ② In the field of small kitchen appliances, the company ranks first in the overall market share of traditional e-commerce and Douyin channels. According to Aowei Cloud Network data, in 2023, Supor's sales performance in the small kitchen appliance market was superior to the industry level, and the online and offline market share increased; the market for newly-needed categories such as rice cookers and soy milk machines is still growing.

By region, domestic and export sales revenue in 2023 was 15.08/6.196 billion yuan respectively, up 0.88/ 19.28% year-on-year respectively. The online and offline market share of the core categories of the domestic sales business continues to rise. It is expected that online Tmall and JD will maintain steady growth, live e-commerce will grow rapidly, and offline O2O will grow rapidly, increasing the penetration rate of the sinking market. In terms of export sales, in the second half of 2023, thanks to SEB Group's own organic growth and demand for inventory replenishment through channels, the company's export business boom continued to recover, and the export business achieved relatively rapid growth throughout the year. It is expected that export sales will resume steady single-digit growth in 24Q1.

By sales model, direct sales/distribution/export OEM revenue in 2023 was 24.91/126.27/6.185 billion yuan respectively, up 11.69/59.27/ 29.04% year-on-year respectively.

The company's gross profit margin in 2023 was 26.30%, up 0.51 pct year-on-year. 23Q1/23Q2/23Q3/23Q4/24Q1 were 25.22/25.62/25.37/28.63/ 24.42%, respectively, with year-on-year changes of -0.14/-0.49/-0.29/+2.56/-0.80pct, respectively.

By product, the gross margin of cooking appliances/food cooking appliances/cookware and utensils/other household appliances in 2023 was 25.37/22.08/28.67/ 29.34%, respectively, with year-on-year changes of +1.15/+2.35/-1.46/+1.36pct, respectively. The decline in the gross margin of cookware is mainly due to a decrease in the average price of products and an increase in average procurement costs.

By region, domestic and export gross margins in 2023 were 28.70/ 20.47% respectively, up 0.38/1.99pct year-on-year respectively. Domestic competition is fierce, gross margin is under some pressure, and the gross margin trend of export sales is relatively good.

By sales model, the gross margin of direct sales/distribution/export OEM in 2023 was 43.63/25.73/ 20.49%, respectively, an increase of 0.69/0.10/2.01 pct over the previous year.

On the cost side, 2023A/23Q1/23Q2/23Q3/23Q4/24Q1 company's sales expense ratios were 10.79/11.07/10.94/10.51/10.67/ 10.94%, respectively, with year-on-year changes of +0.10/+1.55/-1.33/+0.52/-0.13pct, and the sales expenses rate remained stable throughout '23; the management expense ratios were 1.85/1.91/1.87/1.90/1.73/ 1.71%, respectively, YoY The changes were 0.00/+0.25/ -0.16/ -0.09/-0.05/-0.20pct, and remained stable; the R&D cost rates were 2.02/1.68/1.82/2.02/2.49/ 1.75%, respectively, with year-on-year changes of -0.04/+0.08/-0.40/+0.04/-0.01/+0.07pcts, respectively, and remained stable.

On the profit side, the company's net profit after deduction of non-return to mother in 2023 was 1.994 billion yuan, up 5.63% year on year; 23Q1/23Q2/23Q3/23Q4/24Q1 net profit of 4.26/4.31/4.77/6.60/461 yuan, respectively, with year-on-year changes of 19.13/+12.88/+32.15/+6.78/ +8.06%.

Dividends: The company paid a total cash dividend of 2,440 billion yuan in 2023, with a dividend rate of about 100%. It is expected to stabilize between 50-80% in the future.

Investment advice: The company is a leading domestic cookware and kitchen appliance leader. It collaborates with SEB Group to help grow overseas business. Its innovative capabilities help the product matrix continue to be enriched, the channel layout continues to improve, the comprehensive competitive advantage of products, channels and brands is obvious, and it is actively developing new categories in the fields of kitchen and bathroom appliances, household appliances, etc., and its revenue and performance are expected to continue to grow. We estimate that the net profit for 2024-2026 will be 23.82/26.07/2,852 billion yuan, the corresponding EPS will be 2.95/3.23/3.54 yuan, respectively, and the PE corresponding to the current stock price will be 19.73/18.03/16.48 times, respectively. Maintain a “Recommended” rating.

Risk warning: macroeconomic fluctuations, raw material price fluctuations, exchange rate fluctuations, performance of new categories falling short of expectations, increased market competition, etc.