Event: On April 25, 2024, Omar Electric released its 2024 quarterly report. 2024Q1 revenue/net profit attributable to mother/net profit excluding non-attributable net profit were 41.98/2.25/224 million yuan, respectively, or +24.60/+27.83/ +33.25% year-on-year, respectively. Net cash flow from operating activities was $434 million, -18.04% YoY.
The boom in export sales of 2024Q1 ice washing drove revenue growth of more than 20%, and TCL ice washing export sales growth rate was impressive. According to industry online data, the sales volume of 2024Q1 Omar refrigerators was +33%, with internal/export sales +1.9/ +38.6% respectively, and TCL refrigerators/washing machine sales were +10.6/ +42.4% year on year, respectively. Among them, domestic sales were -3.4/ +8.5%, and export sales were +65.1/ +117.9%, respectively. According to data from the General Administration of Customs, the export volume of 2024Q1 refrigerators/washing machines was +34.4/ +30.0% year on year, respectively. The overall export boom of Omar refrigerators was at the same rate as the industry. TCL The growth rate of sales of cold washing is far higher than the industry average, mainly due to the promotion of global layout and small scale.
2024Q1 gross margin declined, and the fee control effect clearly led to a flat net profit margin to mother. Gross profit margin:
2024Q1 was 20.28%, or 1.88pct year over year. It may be mainly affected by price adjustments for ice washing, rising shipping costs, and raw material prices. Expense rate: The 2024Q1 annual sales/management/R&D/finance cost rates were 3.64/2.87/2.95/ -0.84%, respectively, and -0.22/-0.18/-0.98pct, respectively. All cost ratios were optimized, and the cost control effect was obvious. Net profit margin to mother: 5.37% in 2024Q1, +0.14pct year over year.
Investment suggestions: The company plans to change its name to TCL Smart Home, with AI smart home appliances as the development direction. Its Hefei home appliances focus on TCL's own brand of high-end cold washing business and actively promote the global layout; maintain leading export sales of Omar refrigerators, continue to optimize product structure, and continue to expand emerging markets; at the same time, focus on reducing costs and improving operational efficiency, and are optimistic that revenue performance will continue to grow after the transformation. We estimate that in 2024-2026, the company's net profit to mother will be 870/10.04/1,164 million yuan, the corresponding EPS will be 0.80/0.93/1.07 yuan, respectively, and the current stock price will correspond to PE 12.03/10.43/8.99 times, respectively. Maintain a “Recommended” rating.
Risk warning: Fluctuations in raw material prices, exchange rate fluctuations, increased market competition, changes in trade policies in exporting countries and regions, unrecoverable accounts receivable, etc.