The company released its annual report for the year 23 and the financial report for 24Q1. The company achieved revenue of 15.502 billion yuan in 2013, 1.16% year-on-year, and net profit to mother of 612 million yuan, -63.96% year-on-year. Looking at a single quarter, 23Q4 achieved revenue of 4.971 billion yuan, -4.42% year-on-year, and realized net profit of 08 billion yuan, or -98.54% year-on-year. 24Q1 achieved revenue of 3.474 billion yuan, or 7.35% year-on-year, and realized net profit of 298 million yuan, or -8.71% year-on-year.
The company announced a dividend of 3 yuan for every 10 shares, with a dividend rate of 27.74%.
The growth of the Covos brand is under pressure, and Tianke is still growing, actively expanding overseas channels. By brand, the company's annual revenue from the Covos brand was 7.681 billion yuan, -1.49% year-on-year, and the revenue of the Tianke brand was 7.271 billion yuan, or 5.24% year-on-year. By channel, the company's annual domestic revenue was -11.43% year-on-year, and overseas revenue was 25.76% year-on-year (Covos's overseas revenue yoy 20%, plus overseas revenue yoy 40.5%), and the overseas share increased from 34% in '22 to 42% in '23. The company actively invigorates the international market, establishes an overseas headquarters in Singapore, and gradually explores the European and American markets. In addition, ADVANCED has the highest sales volume on multiple Amazon sites and is gradually entering offline channels in the US.
Competition in the industry intensified, upfront investment was increased in the expansion of new categories, the company's gross margin fell and expenses increased, and the net profit margin for the whole year was under pressure, and there was an improvement in 24Q1. In '23, the company's gross margin was -4.11pp to 47.50%, the sales/management/ R&D expenses ratio changed by 4.01pp/-0.45pp/0.46pp to 34.17%/3.76%/5.32% year-on-year, respectively, and the net profit margin for 23 was -7.13pp to 3.95% yoy. Looking at the single quarter, the net profit margin for 23Q4 was -10.91 pp to 0.17% year on year, the net profit margin for 24Q1 was 1.51 pp to 8.57% year on year, and the net profit margin to mother for 24Q1 improved month-on-month.
Profit forecasting and investment advice. The company's revenue side remains stable, and the profit side is pressured by the competitive environment and the short-term launch of new products. Starting in the second half of 2023, the company will adjust its strategic focus to further enrich the product price segment.
In the long run, sweepers and floor washers are still major products that are expected to continue to increase in penetration rate. We judge that the company is expected to benefit from industry space and industry growth through brand accumulation and leading position, and the cultivation of new categories such as commercial robots and lawn mowers is also expected to gradually release revenue contributions. As the company's profit margin gradually recovers, we expect the company to achieve net profit of 1,416 billion yuan in 2024, with a PE valuation of 20-25 times in 24 years, corresponding to a reasonable value range of 49.2-61.5 yuan, and maintain a “superior to market” rating.
Risk warning. Demand for terminals fluctuates, and industry competition intensifies.