The company released its 2024 quarterly report:
24Q1: Revenue of $1.84 billion (+58.7%) went to mother $40 million (+95.2%) after deducting non-$340 million (+110%).
Both 24Q1 revenue and profit exceeded market expectations, and the 23 annual report was previously published.
The core of the 24Q1 exceeded expectations came from the growth rate of export sales.
Revenue analysis: We expect the internal/external ratio to remain at 3:7 in 24Q1, with a growth rate of about +20/ 80%? Domestic sales: We expect domestic sales revenue of about 500 million (+20% year over year), and we expect volume and price increases of +25%/-4% year over year in 24Q1, respectively (see our data tracking).
Our analysis: The increase in domestic sales is driven by the company's price-performance ratio P10S and P10Spro. At the same time, the 20% growth rate this quarter does not include pre-sale revenue from new products released in 24Q1. 24Q2 will have an incremental contribution from the new G series and V series products.
Export sales: We expect export sales revenue of about 1.35 billion yuan (+80% year over year), exceeding market expectations. The core regions of Europe, North America, and Asia Pacific each have growth rates of +80%/100%/60% year over year. Overseas regions are all growing at high rates and have a balanced growth drive.
Our analysis: Growth in Europe stemmed from refined operations and the establishment of new direct Amazon management in Europe; growth in North America stemmed from prominent online Amazon growth and the expansion of offline channels in the US; growth in the Asia-Pacific region stemmed from new development in the region and intensive cultivation in the original regions.
Share: The company ranked first in the North American Amazon market share in 24Q1. Previously, it was second in 23Q4.
Profit analysis: marginally looking at profitability stabilizing
In 24Q1, the company's gross margin was flat +6.6pct month-on-month, and the net profit margin was +4.1 pct month-on-month. Overall, profitability stabilized (mainly due to the company's separate control of the bottom line of each channel's net interest rate, and profit fluctuations came from structural changes).
We analyzed the main reasons for profit improvement: 1. Higher year-on-year increase in gross margin, due to structural improvements due to high-margin new products and increased overseas share; 2. The total cost ratio of the four categories was -1.5 Pct year on year, with significant rate dilution; and 3. 24Q1 asset impairment of 55 million had a short-term impact.
The core reason for the slight month-on-month decline in profit is a sharp increase in R&D rates, mainly due to the short-term pace.
Our view: In 24 years, global potential mining companies have performed well for four consecutive quarters since 23Q2 under domestic price broadening and export dividends. Looking ahead to 24 years, the company has launched the P10S series in China and formed the P-V-G three series for the first time, covering low, medium and high levels, forming a more complete new product matrix than before, and launching 4 new products and channel changes for mid-range and high-end sweepers overseas. 24Q1 had a low base effect. Starting in Q2, we can see the increase in revenue brought about by the centralized launch of a large number of new products at home and abroad. Overseas highlights include European online+US entry offline+Asia-Pacific development to further explore global share space.
Profit forecast: Considering that overseas exceeded expectations, we slightly raised our full-year profit forecast. In 2024-2026, the company's revenue is expected to be 113/137/15.8 billion yuan (previous value: 107/128/14.8 billion), +30%/+22%/+15% year over year, return to mother 25.8/30.8/3.51 billion yuan (previous value: 24.7/29.5/3.44 billion), +26%/+14% year over year; current PE21/18/15X maintains a “buy” rating.
Risk warning
Industry sentiment fluctuates, industry competition intensifies, and new products fall short of expectations.