Incidents:
The company released its 2024 quarterly report. 24Q1 achieved total revenue of 1.8 billion yuan, YoY +59%; net profit to mother of 400 million yuan, YoY +95%; net profit after deducting non-return to mother of 300 million yuan, YoY +110%.
Comment:
Domestic sales improved markedly year over year, and overseas sales continued to grow at a high rate. 24Q1's revenue was +59% year-on-year. Thanks to overseas product structure upgrades, regional channel expansion & new regional market development, it is estimated that the year-on-year growth rate of overseas revenue was higher than that of domestic revenue. By channel, 1) Domestic online channels: According to Aowei Cloud Network, 24Q1's online retail volume/volume ratio was +27%, the average price was 3,548 yuan, -1% year over year. The company's P10 series products had obvious advantages and continued to drive sales upward; 2) Domestic offline channels: According to Aowei Cloud Network, 24Q1's offline retail volume/volume YoY ratio +289%/+252%, the average price was 4,388 yuan, +11% compared to the same channel, and the offline growth was rapid, thanks to the company's long-term market development+ input. By product, 1) the P10 series products continued to grow in sales. The company launched the P10S series in February, and it is expected that the share of sales will gradually increase starting in Q2; 2) launching new V20 and G20S flagship products to complete the mid-to-high-end price band layout domestically and continue the trend of product structure upgrading overseas.
The cost side was well controlled, and the net interest rate increased steadily. The gross sales margin/gross margin of the 24Q1 company was 35.7%/56.5%, +6.8pct/+6.6pct. The main reason for the increase in the company's gross margin was the improvement of the overseas channel structure+the upgrading of the overseas product structure+ the continuous reduction in overall product costs. The 24Q1 sales/management/ R&D/ finance expense ratios were 20.8%/2.8%/10.6%/-0.8% (-0.2/-1.7/-0.8/+1.1 pct), and the 24Q1 net profit margin was 21.7%, +4.1pct year on year. In terms of balance sheet, the company's monetary capital+transactional financial assets amounted to 5.8 billion yuan at the end of the 24Q1 quarter, accounting for 40% of total assets, with sufficient operating safety margin; 24Q1 notes receivable and accounts receivable +25% year-on-year, and notes payable and accounts payable +74% year-on-year. In terms of cash flow, the company's net cash flow from operating activities at the end of the 24Q1 quarter was 200 million yuan, +70% year-on-year, and the cash flow situation improved markedly.
Profit forecast, valuation and rating: The company is a leading enterprise in the field of intelligent sweeping robots. The company has strong R&D strength, leading product strength and rapid promotion of new iterations to support the long-term upward trend in profitability. It raised the company's net profit forecast for 2024-26 to 25.1/29.7/3.50 billion yuan (up 6%/9%/10% from the previous forecast, respectively), and PE corresponding to the current price is 22, 19, and 16 times. As consumption recovers and demand picks up, performance is expected to continue to grow and maintain the “gain” rating.
Risk warning: Prices of raw materials have increased markedly, market competition has intensified, and shipping channels are poor.