Event: The company released its 2024 quarterly report. The 24Q1 company achieved operating income of 23.5 billion yuan, +21% year over year, achieved net profit of 980 million yuan, +59% year over year, and realized net profit of non-return to mother of 8.4 billion yuan, +61% year over year. The performance greatly exceeded expectations.
Revenue increased significantly, and export sales grew at a higher rate. 1) Ice washing: Under a low base last year, we estimate that Q1's export sales increased significantly, and the amount of washing machines released. The company continues to develop its own brands overseas, using ASEAN as a pilot for a new sales structure, continuously promoting organizational optimization, fee reduction and efficiency, and the company's brand index continues to improve. 2) Shortage: Affected by factors such as preparations for the peak season, rising raw material prices, and the advance of orders due to the Red Sea crisis, we estimate that Q1 companies' domestic and foreign sales revenue increased significantly. 3) CCTV: In the context of declining real estate completion growth, the company's performance is still impressive. According to Industry Online, in January-January, the company's multi-online domestic sales amount was 2.9 billion yuan, +20% over the same period last year.
Increased profitability. 24Q1 achieved a gross profit margin of 21.63%, +0.51 pct year on year, achieved a net profit margin of 4.18% to mother, and +1.01 pct year on year. This is still a significant increase in the context of rising raw materials. On the cost side, 24Q1 company's sales/management/R&D/finance expenses rates were 10.00%/2.65%/3.30%/-0.31%, respectively, -0.09/-0.01/+0.33/ -0.22pct. The cost ratio remained stable during the period. The company continues to promote supply chain integration, focus on improving efficiency, optimize the channel structure, and continue to implement fee reductions and efficiency improvements.
On January 8, 2024, the company announced the 2024 A-share employee stock ownership plan (draft). The target value for the company's performance assessment is net profit to mother for 2024/2025/2026 +122%/+155%/+194% compared to 2022, respectively, and corresponding net profit to mother of RMB 31.9/36.6/4.26 billion yuan, respectively. The performance target is high, and the long-term incentive mechanism is sound, which further binds the interests of the company's employees and shareholders.
Investment advice: We expect the company's net profit to be 34/39/4.5 billion yuan respectively in 24-26, an increase of 20%/15%/16%, corresponding to a valuation of 15/13/12 times, maintaining a “highly recommended” rating.
Risk warning: repeated epidemics, sharp rise in raw material prices, real estate completion falling short of expectations, terminal demand falling short of expectations, uncertainty about the implementation of employee shareholding plans, etc.