The dividend ratio in 2023 is more than half, and is expected to rise steadily over the next three years, maintaining the “buy” rating to achieve revenue of 11.20 billion yuan (+9.1%), net profit to mother of 1.73 billion (+10.2%), net profit of 1.58 billion yuan (+7.1%); 2024Q1 achieved revenue of 2.24 billion yuan (+2.8%), net profit to mother of 40 million (+2.5%), net profit of non-return net profit of 350 million (+3.3%). The total dividend ratio of the company in 2023 is about 55%. The 2024-2026 shareholder return plan is expected to pay dividends twice a year, and the dividend ratio has increased steadily compared to 2023, effectively strengthening investor confidence. Considering the pressure on real estate, we lowered our 2024-2025 profit forecast and added 2026 profit forecast. We expect net profit to be 19.2/21.5/2.37 billion yuan for 2024-2026 (the original value for 2024-2025 was 2.06/2.28 billion yuan), the corresponding EPS was 2.02/2.26/2.49 yuan. The current stock price corresponds to 11.8/10.5/9.6 times PE, maintaining the “buy” rating.
The traditional category has a stable position and steady growth, and the new washing and integrated categories have created a second growth curve by product: (1) Traditional categories are in a stable position and achieved steady growth: in 2023, the company's range hoods/gas stoves were +10.13%/+8.71% year-on-year, respectively. According to Aowei data, the boss brand achieved the highest online share in various categories such as smoke stove packages and range hoods. Among them, the online retail sales market share of kitchen appliance packages was 31.5% (+1pcts).
In terms of offline channels, range hoods and gas stoves account for 31.0%/30.0% respectively, leading the market share. (2) New categories such as washing and integration achieved relatively rapid growth: in 2023, the company's revenue of dishwashers/water heaters/integrated stove/other small household appliances was +27.94%/+21.17%/+20.58%/+63.16%, respectively. According to Ovi data, the company's offline share of built-in dishwashers reached 19.6% in 2023, ranking second. By sales model: In 2023, the company's distribution/direct management/engineering/other channel revenue was +19.5%/-21.0%/+8.5%/+0.8%/+67.2% year-on-year, respectively. During the reporting period, the company clarified the positioning of famous brands and achieved complementarity with the boss's main brand, focusing on boosting e-commerce and fully integrating declining channels. Famous brands achieved revenue of 450 million yuan (+33.3%) in 2023.
Gross margin has been disrupted due to changes in category and channel structure. Profitability remained stable with a gross profit margin of 50.7% (+0.7pct) in 2023 and a 2024Q1 gross profit margin of 50.6% (-4.1pct). Fluctuations in gross margins in a single quarter are expected to be due to rapid growth in emerging categories and famous brands in terms of cost performance, as well as raw material disturbances. On the cost side, the cost rate during 2024Q1 was 31.8% (-4.8pct), with sales/management/R&D/finance cost ratios of -4.2/+0.1/flat/-0.7 pct, respectively, year-on-year. Under the combined influence, net interest rate for 2023 was 15.3% (+0.1pct), net interest rate 15.5% (+0.2pct), net profit margin 14.1% (-0.3pct); 2024Q1 net interest rate 17.7% (-0.1pct), net profit margin was 17.8% (-0.05pct), net profit margin was 15.8% (+0.1pct) after deducting non-net interest rate, and profitability remained stable.
Risk warning: risk of falling demand; risk of raw material prices; sales of new products falling short of expectations.