Incident Overview

The company released its quarterly report for '24:

24Q1: Total operating income of 1,174 million yuan (YOY -14.52%), net profit to mother 180 million yuan (YOY -43.78%), net profit after deduction of 166 million yuan (YOY -40.77%).

Analytical judgment

Revenue side: Q1 revenue fell 15%. We think it may be due to Valentine's Day affecting sales during the Spring Festival this year, and Valentine's Day is an important holiday promotion point for the company. Since this year, the company has launched new products such as Feike's 399 yuan mecha cool shaver and Feike's 199 yuan high-speed hair dryer. It has strong product strength. “vPro” on the brand operation side has taken over part of the “Feike” original cost-effective market in an orderly manner, and is looking forward to 520 sales during the Q2 peak season.

Profit side: Under the trend of upgrading middle and high-end products, gross margin is still increasing, and high sales investment has put pressure on profits. 24Q1 gross profit margin of 57.10% (YOY+1.02pct), net profit margin to mother 15.33% (YOY-7.98pct). 24Q1 The company's sales/management/R&D expenses rate was 33.61%/3.65%/1.55%, respectively, year-on-year

+8.85pct/+1.11pct/-0.14pct.

Investment advice

Combined with the quarterly report, we adjusted the company's revenue forecast for 24-26 to $52.70/58.89/6.584 billion yuan (the previous value was 62.10/6.943 billion yuan in 24-25), +4.16%/+11.74%/+11.80%, respectively. In terms of gross margin, it is estimated to be 58.60%/59.60%/59.60% for 24-26, respectively. The net profit corresponding to the mother for 24-26 was 10.91/12.52/ 1,412 billion yuan, respectively (previous value was $1,320/1,488 billion in 24-25), +6.97%/+14.82%/+12.74% year-on-year, respectively. The corresponding EPS was 2.50/2.88/3.24 yuan respectively (previous value was 3.03/3.4 yuan for 24-25). Based on the closing price of 47.30 yuan on April 29, 24, the corresponding PE was 18.89/16.45/14.59 times, respectively, maintaining the “gain” rating.

Risk warning

Risk of macroeconomic fluctuations; risk of price increases for raw materials; increased risk of competition.