24Q1 revenue and net profit to mother increased 15% and 45% year-on-year
Weixing Co., Ltd. released its 2024 quarterly report. The 24Q1 company achieved operating income of 801 million yuan, a year-on-year increase of 14.83%, net profit of 77.92 million yuan, a year-on-year increase of 45.25%, net profit of 75.23 million yuan after deducting non-return net profit of 75.23 million yuan, a year-on-year increase of 46.13%, and EPS of 0.07 yuan.
The profit side of the 24Q1 company grew faster than revenue due mainly to a slight increase in gross margin, a decrease in expense ratio, and an increase in other revenue (VAT plus deduction). The net profit margin increased by 2.04PCT to 9.73% year-on-year.
Gross margin increased slightly, financial expense ratio decreased significantly, inventory increased, turnover accelerated, net operating cash flow increased gross profit margin: 24Q1 gross margin rose slightly by 0.23PCT to 37.93% year-on-year.
Expense rate for the period: The cost ratio for the 24Q1 period decreased by 2.30 PCT to 26.53% year on year. Among them, sales, management, R&D, and finance expenses were 9.46% (-0.37PCT), 12.95% (+0.49PCT), 4.53% (+0.42PCT), and -0.41% (-2.84PCT), respectively. The year-on-year decrease in financial expenses was mainly due to net exchange gains in 24Q1, while 23Q1 contributed to net exchange losses, as well as reduced interest expenses and increased interest income.
Other indicators: 1) Inventory at the end of March 2024 was 734 million yuan, up 21.48% from the beginning of the year and 13.85% year on year; the number of inventory turnover days was 121 days, a decrease of 4 days year on year. 2) Accounts receivable at the end of March 2024 were $390 million, a decrease of 16.17% from the beginning of the year and an increase of 2.72% over the previous year; the number of accounts receivable turnover days was 48 days, a decrease of 1 day from the previous year. 3) Other income in 24Q1 was 18.67 million yuan, an increase of 305.49% over the previous year, mainly due to an increase in VAT deductions. 4) Net operating cash flow in 24Q1 was 94.31 million yuan, which turned into a net inflow compared to the previous year.
It is expected that leading accessories companies will continue to grow at high quality, maintain profit forecasts and “buy” ratings, perform well in the first quarter, achieve rapid revenue growth, and improve profitability. We continue to be optimistic about the company as a leader in accessories. It has leading delivery speed, outstanding quick reaction strength and service capabilities, and can be expected to steadily seize market share over a long period of time. At the same time, in recent years, the company has focused on major customers, gradually improved its product strength, and continuously enriched its category structure to provide customers with one-stop service to meet the diverse needs of customers. The company's production capacity in Vietnam will be put into production and shipment in 24 years, and is gradually approaching customers to further advance its global strategy. We maintain the company's 24-26 profit forecast. Based on the latest share capital calculation, the corresponding EPS for 24-26 was 0.57, 0.66, and 0.74 yuan, respectively, and the 24-year and 25-year PE were 21 times and 18 times, respectively, maintaining a “buy” rating.
Risk warning: Domestic and foreign demand continues to weaken, causing damage to the company's orders and gross margin; production capacity expansion falls short of expectations; rising raw material prices, rising freight rates, rising labor costs; and exchange rate fluctuations.