Core views:
Shuaifeng Electric released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 830 million yuan (YoY -12.2%), net profit to mother of 190 million yuan (YoY -11.5%), gross profit margin of 46.9% (YoY+0.8pct), and net profit margin 22.8% (YoY+0.2pct). The overall performance of the company in '23 was under pressure, mainly due to factors such as real estate fluctuations, and the high growth trend of the industry was curbed. The shrinking incremental market, which mainly focuses on the renovation of new homes, has put pressure on the kitchen appliance market, and the integrated stove industry has fallen into a situation where both volume and value have declined and corporate performance is under pressure.
2024Q1's performance was under pressure, and profitability declined. The company had first-quarter revenue of 120 million yuan (YoY -33.0%) and net profit attributable to mother of 0.2 billion yuan (YoY -44.5%). The gross profit margin was 44.6% (YoY -3.1 pct), the net profit margin was 18.9% (YoY-3.9 pct), and the sales/management/finance/R&D expense ratios were +4.1pct/+4.8pct/-6.9pct/+1.0pct, respectively.
Policy incentives are expected to raise industry demand, and deepening channel cultivation reflects determination to grab share. At the industry level, the trade-in policy is expected to bring more room for industry growth and drive the integrated stove market to bottom up. At the company level, more than 100 new dealers were added and optimized in 2023, maintaining the number of dealers close to 1,300, continuously improving the quality of dealers, while transforming Shuaifeng's fifth-generation image store specialty stores to achieve full coverage of physical stores at the prefecture-level market.
The company paid 0.62 yuan per share in 2023. The dividend ratio was the same as in 2022, at 60.2%.
The company announced its 2023 profit distribution plan. It plans to distribute cash dividends of RMB 6.20 (tax included) to all shareholders for every 10 shares, for a total of 110 million yuan, with a dividend ratio of 60.2%.
Based on the closing price of April 22, 2024, on the date of publication of the annual report, the dividend ratio reached 4.5%.
Profit forecast and investment advice: The company's net profit for 24-26 is estimated to be 2.0, 2.1 billion yuan, and 220 million yuan, respectively, with year-on-year growth rates of 6.5%, 5.2%, and 4.8%, respectively. The latest closing price corresponding to 2024 PE is 12.56x. Referring to comparable company valuations and the company's dividend level, the company was given 13 times PE in 2024, corresponding to a reasonable value of 14.27 yuan per share, giving it an “increase in holdings” rating.
Risk warning: Increased market competition, fluctuating raw material prices, risk of fluctuations in the real estate market.