The company released its 2023 annual report and 2024 quarterly report: in 2023, the company achieved revenue of 2.84 billion yuan, an increase of 11.47%; realized net profit of 219 million yuan, an increase of 3.59% over the previous year; net profit after deducting 200 million yuan, an increase of 3.83% over the previous year. 2023Q4 achieved operating income of 638 million yuan, a year-on-year increase of 11.29%; realized net profit of 43 million yuan, a year-on-year decrease of 24.82%; net profit after deducting net income of 37 million yuan, or -23.12% year-on-year. 2024Q1's revenue was 523 million yuan, up 32.30% year on year; net profit to mother was 59 million yuan, up 47.15% year on year; net profit after deduction was 53 million yuan, up 54.48% year on year.
Seizing the smart bathroom opportunity, the company's own brand has shown results in developing the domestic market. In 2023, the company's domestic revenue was 1,649 million yuan, up 17.26% year on year; overseas revenue was 536 million yuan, down 3.23% year on year, mainly due to the company closely grasping the development opportunities of the smart bathroom industry, optimizing the product structure, and promoting the market development of its own domestic brands. Further, it continued to increase brand awareness and market share through refined market strategies, which ensured the steady growth of the company's overall revenue. By product, in 2023, the company's smart toilets and covers achieved revenue of 1,266 billion yuan, an increase of 25.90% year on year; revenue from same-level drainage system products was 210 million yuan, up 17.72% year on year; and revenue from water tanks and accessories was 620 million yuan, down 13.65% year on year. We believe that the growth of the company's own brand business is still quite prominent. In 2024, the company is still expected to follow the concept of seizing consumer demand, cover new products in every price range, maintain the stability of quality functions and cost performance advantages. Looking ahead, the company will further lay out the overall bathroom space. The products are expected to include concealed bathrooms, products related to the same floor drainage system, smart toilets, showers, bathroom cabinets, etc.
Profit forecast and investment rating: We expect the company's net profit for 2024-2026 to be 277, 3.37 million yuan, and 396 million yuan respectively, up 26.7%, 21.7%, and 17.4% year-on-year. The current closing price corresponds to 2024-2025 PE 17 and 14 times. As a toilet flush component and smart toilet faucet company, the company was given a PE valuation of 21 to 22 times in 2024, corresponding to a reasonable value range of 13.91 to 14.58 yuan, giving it a “superior to the market” rating.
Risk warning: Terminal demand falls short of expectations, private brand development falls short of expectations, raw material prices fluctuate, and exchange rates fluctuate.