Event: The company released its 2024 quarterly report. 2024Q1 achieved total operating revenue of 106.483 billion yuan, up 10.19% year on year; realized net profit of 9 billion yuan, up 11.91% year on year, net profit without return to mother of 9.2 billion yuan, an increase of 20.39% year on year.
The smart home business is growing steadily, and new energy and industrial technology are growing rapidly. 2024Q1's smart home business revenue also increased 11%, while commercial and industrial solutions revenue also increased 9%. In terms of commercial and industrial solutions, revenue from intelligent building technology, new energy and industrial technology, and robotics and automation was $82/77/6.7 billion, respectively, or +6%/+23%/-12%. Among them, the slowdown in smart building technology revenue growth was mainly affected by changes in heat pump subsidy policies in some countries and the decline in European gas prices, with the same increase of 28% in categories other than heat pumps; the decline in robot and automation revenue was mainly due to the suspension of new capacity expansion plans of domestic automobile manufacturers and product strategy adjustments by overseas automobile manufacturers; and the logistics automation business was driven by strong overseas offline consumption, with a growth rate of over 9%.
Profitability increased year over year. Gross profit margin: 2024Q1's gross margin increased by 3.28pct year-on-year to 27.32%. Rate side: The 2024Q1 sales/management/ R&D/ finance rate was 9.98%/3.11%/3.38%/0.52%, with a year-on-year change of 1.24pct/0.21pct/-0.02pct/1.26pct. Changes in financial rates are mainly affected by changes in exchange rates. Net interest rate: The company's 2024Q1 net interest rate changed 0.05pct to 8.52% year-on-year. Changes in net interest rates are also affected by reduced investment returns, losses due to changes in fair value, and increased asset impairment losses. Investment income for 24Q1 was $0.28 billion, -89.49% year over year, mainly due to a decrease in investment income from disposal of derivative financial assets and liabilities; fair value change loss of 280 million yuan, -338.51% year over year, mainly due to changes in fair value of equity instrument investments; asset impairment loss of 176 million yuan, or -30.29% year over year, mainly due to increased inventory price drop losses.
Cash flow increased year-on-year, and contract liabilities declined month-on-month. Cash flow: 24Q1 The company's net operating cash flow was 13.929 billion yuan, +50.22% year-on-year. Among them, cash received from sales of goods was 88.583 billion yuan, +16.22% year-on-year. Contract liabilities: As of 24Q1, the company's contract liabilities were 37.555 billion yuan, +32.16% year over year, and -10.08% month on month.
Profit forecasting and investment advice. As a leader in the white power industry, the company's operating performance is steady. Considering the company's performance in the first quarter, we expect the company to achieve net profit of 381.49/421.29/46.438 billion yuan in 2024-2026, an increase of 13.1%/10.4%/10.2% over the previous year, maintaining a “buy” investment rating.
Risk warning: Fluctuations in raw material prices, fluctuations in the real estate market, and increased market competition.