The company released the 24Q1 financial report. The company achieved revenue of 5.378 billion yuan in 24Q1, 8.38% year-on-year, and net profit to mother of 470 million yuan, or 7.23% year-on-year.

Domestic sales are steady, and export sales are still booming. The company grew by about 8% in 24Q1, and revenue continued its steady growth trend.

Due to the sharp decline in the company's export sales in 23Q1, the export revenue base for the same period last year was low, so we judge that the company's export sales continued to grow rapidly since 23Q3. According to our estimates, if we calculate a 0% increase in domestic sales revenue, the company's 24Q1 export revenue increased by 44%. If we estimate a 2% increase in domestic sales revenue, the company's 24Q1 export revenue increased 36%. The company's export sales boom is still high, and the revenue growth rate is far higher than that of domestic sales.

The increase in the share of export sales slightly affected gross profit margin, and overall profit was stable. The sharp increase in export sales revenue led to changes in the revenue structure. The company's gross margin in a single quarter was -0.80 pct to 24.42% year on year, sales/management/R&D expenses changed to -0.13 pct/-0.19 pct/0.07 pct to 10.94%/1.72%/1.75%, respectively, and the net profit margin to mother was -0.09 pct to 8.73% year over year.

Profit forecasting and investment advice. Looking ahead to 2024, we believe that the company's export sales are still expected to grow in the context of a high base, and domestic sales will continue to grow through category expansion, reducing costs and increasing efficiency to improve profitability. We expect the company to achieve EPS of 2.91 yuan, 3.16 yuan, and 3.42 yuan in 2024-2026, with a year-on-year increase of 7.8%, 8.4%, and 8.2%. Considering that the company has continued to expand categories to achieve steady growth and has maintained high dividends for many years, referring to comparable company valuation levels, the company was given a PE valuation of 20-22 times in 2024. The corresponding reasonable value range was 58.2-64.02 yuan, which is “superior to the market” rating.

Risk warning. SEB order transfers fell short of expectations, and competition in the domestic market was fierce.