Incident: Yitian Intelligence announced the 2023 Annual Report and 2024 Quarterly Report. The company achieved revenue of 1.23 billion yuan in 2023, YoY -3.8%; realized net profit of 180 million yuan, YoY -14.6%. In Q4, the company achieved revenue of 280 million yuan in a single quarter, YoY -9.6%; realized net profit attributable to mother of 39.65 million yuan, YoY -91.9%. Yitian achieved revenue of 130 million yuan in 2024Q1, YoY -44.5%; realized net profit of 4,527 million yuan, YoY -88.9%. Affected by the real estate boom, the company's revenue growth rate has slowed.
Real estate sentiment affects the company's sales: According to the company's announcement, in 2023, Yitian distribution channel achieved revenue of 980 million yuan, YoY -9.4%; direct sales channel achieved revenue of 250 million yuan, YoY +28.1%. Among them, Yitian's online transaction amount in 2023 was 900 million yuan, YoY +10.7%; offline, the company had about 1,500 offline dealers in 2023, and the number of channels remained stable. Yitian's revenue declined from 2023Q4 to 2024Q1 due to the impact of real estate, as the sales area for integrated stoves is mainly concentrated in the third- and fourth-line rough new houses.
Q1 profitability decline: According to the company announcement, Yitian's 2024Q1 net interest rate was 3.6%, down 14.3pct year on year, mainly due to: 1) due to increased terminal competition, Q1 gross margin was -4.9pct year on year; 2) the cost ratio increased during the Q1 period, and the sales expenses rate, management expenses rate, and R&D expense ratio increased by 10 pct/4.2pct/1.7 pct year on year, respectively.
High dividend rate: According to the announcement, Yitian plans to pay a cash dividend of 1 yuan (tax included) per share and use the Provident Fund to transfer 3 shares for every 10 shares to all shareholders. In 2023, the company plans to distribute a cash dividend of 105 million yuan, accounting for 59% of the current net profit to mother.
Investment advice: A leading enterprise in the Yitian integrated stove industry, with product advantages and extensive channel coverage. We expect the company's EPS from 2024 to 2025 to be 1.64/1.75 yuan, respectively, and the target price for 6 months is 34.44 yuan, corresponding to 21 times PE in 2024, maintaining a buy-A investment rating.
Risk warning: The real estate market fluctuates, and the price of raw materials has risen sharply.