The 24Q1 results exceeded expectations, and the high percentage dividend highlights the value of shareholder returns. In 2023, the company achieved total operating income of 7.795 billion yuan, +7.22% year on year, net profit attributable to shareholders of listed companies of 924 million yuan, and realized net profit of 848 million yuan after deducted from mother, +34.17% year on year; of these, Q4 achieved operating income of 2,281 million yuan, +10.50% year on year, realized net profit of 265 million yuan, -4.57% year on year, realized net profit without deduction of 283 million yuan year on year, +12.98% year on year. In 24Q1, the company achieved revenue of 1,583 billion yuan, and achieved net profit of 121 million yuan, or +23.48% year over year. The revenue side met our expectations in the performance outlook, and the performance exceeded expectations.
In the same period, the company announced its 2023 profit distribution plan. It plans to distribute a cash dividend of 8.5 yuan (tax included) to all shareholders for every 10 shares, for a total of 626 million yuan in discovery dividends, accounting for 67.7% of the company's net profit due to the mother for the year 23, corresponding to the current dividend rate of about 5%.
Accelerate the development of multiple businesses in parallel. The domestic lighting business was still under pressure in '23, and demand is gradually recovering. At the company level, in terms of offline consumer business, in terms of offline consumer business, it focuses on empowering core benchmark stores across the country. Through systematic training and guidance, standardized empowerment of all operating processes, and diversified active marketing methods, the company continues to expand the rapid growth of related businesses. At the same time, it continues to upgrade products and solutions, continuously optimize the image and experience of industrial terminal stores, upgrade the whole house intelligent lighting experience hall and zone, so that consumers can enjoy an immersive shopping experience. In addition, the company continues to promote the digital and refined management of distribution outlets to further expand market coverage; in terms of offline business, the company continues to expand its market coverage. The commercial license business in the fields of offices, commercial chains, etc., has established benchmark projects in various segments, including smart lighting transformation projects for large national supermarket chains, the new retail leading fresh supermarket project, the Hangzhou Asian Games project, the Anhui Photovoltaic Module Industrial Park plant project, the Yunnan Electronic Clean Industrial Plant Phase III project, and the Guangdong Shipping Building intelligent lighting project; in terms of e-commerce business, the company actively creates new popular products to promote the transformation of online categories to the middle and high-end through diversified marketing methods. In terms of overseas business, the company focuses on key regions, continuously optimizes the business structure and channel layout, expands the coverage of retail and distribution outlets in various overseas regions, and continues to expand overseas engineering channels.
Net interest rate for '23 hit a record high since 2014. The company achieved a gross sales margin of 40.33% in 2023, +4.61 pcts year on year, and 24Q1 gross margin of +1.64 pcts year on year to 38.47%. It is expected mainly due to factors such as the company's platform-based cost reduction. In terms of period expenses, the company's 23-year sales expense ratio was 18.48%, +2.63 pcts year on year. It is expected to be mainly affected by factors such as terminal store construction and storage layout and sales staff incentives; management/financial expense ratios were 4.09%/-1.42%, and -0.34/-0.91pct year on year, and R&D expenses increased slightly by 0.32 pcts year on year to 5.40% year on year, eventually recording the company's 23-year net profit margin of 11.93%, +1.12 pcts year over year, a record high since 2014. In 24Q1, the company's net interest rate was 7.66%, +1.18pcts year over year, and profitability was steady, moderate and positive.
Maintain a “buy” investment rating. We maintain our previous profit forecast for the company and added a 26-year profit forecast. We expect the company to achieve net profit of 10.95/12.22/1,352 billion yuan in 24-26, +18.5%/+11.6%/+10.7% year-on-year, corresponding to the current price-earnings ratio of 11/10/9 times, respectively, maintaining a “buy” investment rating.
Risk warning: Risk of fluctuations in raw material prices.