The company released its 2023 annual report and 2024 quarterly report
24Q1 revenue of 3.62 billion yuan, +1.4% year on year; net profit of 220 million yuan, +43.0% year on year; net profit without return to mother of 140 million, +10.0% year on year; profit growth was mainly due to the company ① continuing to implement cost reduction and efficiency; ② raw material procurement prices declined year on year, and the Group's centralized procurement advantage was highlighted.
23Q4 revenue of 6.22 billion yuan, +0.1% year on year; net profit attributable to mother was 730 million yuan, +4.0% year on year; net profit after deducting non-return to mother net profit of 550 million yuan, -18.8% year on year;
In '23, the company's revenue was 22.78 billion yuan, +1.4% year on year; net profit to mother was 3.04 billion yuan, +12.9% year on year; net profit after deducting non-return to mother was 2.75 billion yuan, +5.9% year over year.
In '23, the company adjusted plans on the one hand and quickly completed institutional reforms. Through restructuring the marketing management system, it built an architectural foundation adapted to the future strategic layout of large homes, reshaped the delivery capacity of large household systems, comprehensively promoted product delivery and service quality reforms, and implemented comprehensive cost control and efficiency improvement, with remarkable results.
At present, the company has basically completed marketing and manufacturing business adjustments to match the household business model; it has basically completed the transformation of household products, tactics, mechanisms, etc.; and the management team has accumulated experience and built confidence in local market competition. In '24, we will strive to achieve a 5% to 10% year-on-year increase in operating income, and strive to achieve a 5% year-on-year increase in net profit.
In '23, it is proposed to distribute a discovery dividend of 1.67 billion yuan, accounting for 65.28% of net profit attributable to mother, increasing the dividend ratio.
Cabinet and wooden furniture integration, accessories were affected by phased adjustments in the supply chain in the short term; cabinet revenue of 7.03 billion yuan, gross profit margin of 34.3% year on year, +0.3 pct year on year; wardrobe and supporting revenue of 11.95 billion yuan, -1.6% year on year, gross profit margin 36.5%, year on year +4.7 pct; bathroom 1.13 billion, gross profit margin +9.0% year on year, gross profit margin 25.9%, -0.3 pct year on year; wooden door revenue of 1.38 billion yuan, +2.4% year on year, gross profit margin 21.5% year on year. Among them, revenue from wardrobes and accessories declined slightly, mainly due to the company's supply chain optimization and adjustment of wardrobe accessories, and the phased decline in sales revenue of accessories.
In 24, the company plans to optimize the product system from the dimensions of space home software reconstruction, smart home design, large home color difference management, and improvement of overall channel product competitiveness; in addition, it plans to continuously upgrade products and implement more cost-effective and competitive pricing strategies.
Organizational structure changes are gradually showing results, and retail homes have achieved remarkable results
In '23, dealership revenue was 17.57 billion yuan, the same year on year, with a gross profit margin of 33.9%, +3.2pct year on year; bulk revenue of 3.59 billion yuan, +2.6% year on year, gross profit margin of 25.6%, or -2.2% year on year.
As of the end of '23, there were 6013/1078/1001/465 stores, respectively, -36/+24/-55/ +80, respectively; as of the end of 24Q1, the number of stores was 5848/1027/991/489, respectively, compared to -165/-51/-10/+24 at the end of '23.
Driven by the double impetus of first-mover advantage and the ability to coordinate enterprise organization and operation, Oupai's home strategy will continue to advance: on the one hand, quickly perceive and deepen the research and construction of various household models to explore the development path of large homes that meet European enterprise conditions and market conditions; on the other hand, continue to iterate and assemble innovative business models integrating large household categories and services. By the end of 2023, there were more than 800 cities applying to open Oupai retail stores, and more than 600 cities where major retail stores were already operating normally.
Profitability has been steadily improved, and large-scale delivery reforms have been empowered in multiple dimensions
The gross profit margin for 23 years was 34.2%, the net profit margin was 13.3%, and the net profit margin was +1.3 pct; the 24Q1 company's gross profit margin was 30.0%, +3.3 pct year on year, and the net profit margin was 6.0%, +1.9 pct year on year. Under the advantages of cost reduction and efficiency and raw material collection, profitability increased steadily.
Based on the company's household strategy and informatization strategy, the manufacturing side efficiently achieves a systematic upgrade of the entire product production, logistics, installation and acceptance chain delivery system; the 24-year plan further integrates the group base layout to achieve “perfect, complete, punctual, and low cost” delivery through handling model changes, trusteeship reform, freight shuttle schedule reform, logistics informatization, etc.
Adjust profit forecasts to maintain “buy” ratings
The company has built a city-centered operating model. Under the new marketing organization structure, it will gradually advance 1) the flexible layout of the terminal, with the “1+N” flexible layout, moving forward in two steps; 2) unblocking the integration and optimization of various categories and channel management rights through a regional merit selection mechanism; 3) formulating more competitive and aggressive price strategies according to local conditions through the release of company management, manufacturing, supply chain, etc., to enhance the sustainable management capabilities of terminals while benefiting consumers.
Based on the 23 annual report and the 2014 quarterly report, considering the current business environment, we adjusted our profit forecast. The expected return for 24-26 is 31.9/35.3/3.89 billion (the value before 24-25 was 36.5/4.27 billion yuan, respectively), and the corresponding PE is 13/11/10X, respectively, maintaining a “buy” rating.
Risk warning: Domestic real estate continues to weaken; organizational structure changes and frictions; retail businesses fail to advance as expected; Z continues to evolve from single channel to multi-channel, from single category production and delivery to full case delivery, to finally achieve a systematic upgrade of the whole chain of order acceptance, planning, production, logistics, installation and inspection; the 24-year plan further combines the layout of the group base to achieve “perfect, complete, punctual, and low cost” delivery through handling model changes, logistics informatization, etc.
Adjust profit forecasts to maintain “buy” ratings
The company has built a city-centered operating model. Under the new marketing organization structure, it will gradually advance 1) the flexible layout of the terminal, with the “1+N” flexible layout, moving forward in two steps; 2) unblocking the integration and optimization of various categories and channel management rights through a regional merit selection mechanism; 3) formulating more competitive and aggressive price strategies according to local conditions through the release of company management, manufacturing, supply chain, etc., to enhance the sustainable management capabilities of terminals while benefiting consumers.
Based on the 23 annual report and the 2014 quarterly report, considering the current business environment, we adjusted our profit forecast. The expected return for 24-26 is 31.9/35.3/3.89 billion (the value before 24-25 was 36.5/4.27 billion yuan, respectively), and the corresponding PE is 13/11/10X, respectively, maintaining a “buy” rating.
Risk warning: Domestic real estate continues to weaken; organizational structure changes and frictions; retail housing progress falls short of expectations, etc.