Report guide
Hisense Vision released its 2024 quarterly report. The company achieved revenue of 12.702 billion yuan in 24Q1, +10.61% year on year; net profit to mother of 467 million yuan, -24.81% year on year; net profit without deduction of 378 million yuan, -21.92% year on year. The company's 24Q1 revenue and performance exceeded our expectations and maintained a “buy” rating.
Key points of investment
Revenue side: Hisense's share of global shipments increased, the share of domestic large-size color TVs increased Hisense's share of global shipments, and the increase in the share of domestic 75-inch and above color TVs drove 24Q1's double-digit revenue growth. 1) According to Omdia data, Hisense's global shipment volume in January-January was 4 million units, +7.24% year over year. Global color TV shipment share was 14.45%, up 0.79 pct year on year. 2) According to data from Aowei Cloud Network, large-scale upgrades in the Chinese color TV market continued in 24Q1. Among them, the industry's 75-inch and 85-inch color TV sales increased by 5.2 pcts and 3.6 pcts.
Profit side: Short-term panel price increases are putting pressure on profits
The company achieved a net profit margin of 4.53% in 24Q1, -1.50 pct/+0.15 pct month-on-month, respectively. 1) Although panel prices have rebounded slightly recently, they are still low, and the company adjusted the sales structure of high-end products to optimize profits. The company's 24Q1 gross margin was 15.76%, -2.41 pct/-1.04 pct month-on-month, respectively. 2) The reason for the year-on-year decline in the company's 24Q1 net interest rate and gross margin was due to the increase in panel prices.
Profit forecasting and valuation
We expect the company to achieve revenue of 581/624/68.1 billion yuan in 24-26, corresponding growth rates of 8%/7%/9%, respectively; the company is expected to achieve net profit of 23/27/3 billion yuan in 24-26, corresponding growth rates of 10%/16%/13%, corresponding EPS of 1.77/2.05/2.32 yuan respectively, and corresponding PE 16x/13x/12x respectively. Maintain a “buy” rating.
Risk warning
Exchange rate fluctuations, raw material costs fluctuate, macroeconomic downturn.