The company released its annual report for the year 23 and the financial report for 24Q1. The company achieved revenue of 205.018 billion yuan in 2013, 7.93% year-on-year, and net profit to mother of 29.017 billion yuan, +18.41% year-on-year. Of these, 23Q4 achieved revenue of 49.206 billion yuan, +17.70% year-on-year, and realized net profit of 8.925 billion yuan, or +43.90% year-on-year. 24Q1 achieved revenue of 36.596 billion yuan, +2.53% year-on-year, and realized net profit of 4.675 billion yuan, or +13.77% year-on-year. The company will now pay out 23.8 yuan for every 10 shares in 2023, with a dividend rate of 45.3%, corresponding to a dividend rate of 5.6%.
Revenue split: By product, annual air conditioning was 151.2 billion yuan (yoy +12%), industrial products 10 billion yuan (yoy +32%), green energy was 7.1 billion yuan (yoy +51%), and other businesses focusing on raw materials were 29.4 billion yuan (yoy -18%); by region, domestic sales were 149.7 billion yuan (yoy +15%), and export sales were 24.9 billion yuan (yoy +7%). According to industry online data, Gree's domestic sales YOY +4% in 2023, YOY -2% for export shipments, +15% yoy for domestic sales in the first two months of 24 years, and YOY +12% for export shipments.
Gross sales margin increased, and overall profitability increased. The gross margin for 23 years was +4.53pp to 30.57% (including domestic gross margin +2.78% and export gross margin +9.36%), sales/management/R&D expense ratios changed 2.42pp/0.42pp/-0.01pp to 8.36%/3.19%/3.30%, respectively. The gross sales margin increased, and the net profit margin of 23 was +1.26pp to 14.15% year over year. Looking at the single quarter, the net profit margin for 23Q4 was +3.30pp to 18.14% year on year, and the net profit margin for 24Q1 was +1.27pp to 12.78% year on year.
Cash flow reached a new high throughout the year, and the amount of contract debt was high. The company's net cash flow from operating activities in 2023 was 56.4 billion yuan, which is double the current net profit, reflecting the company's excellent operating quality; the 24Q1 contract debt was 20.5 billion yuan, an increase of 6.9 billion yuan over the same period last year, which is basically the same as 23.7 billion yuan in the same period last year, indicating that the dealer's delivery situation is basically the same as last year, and maintains good enthusiasm.
Profit forecasting and investment advice. The company invested 3 billion yuan to launch home appliance trade-in, including subsidies of 240 yuan to 1,000 yuan for Gree brands and 220 yuan to 800 yuan for non-Gree brands. The trade-in policy is expected to continue to increase brand concentration. The company's revenue side grew steadily, profit margins continued to rise, and steady performance and undervaluation provided sufficient safety cushion. We expect the company to achieve net profit of 31.2 billion yuan in 2024. Referring to comparable company valuations, we will give a PE valuation of 10X-11 times in 2024, corresponding to a reasonable value range of 55.5-61.05 yuan, which is “superior to the market” rating.
Risk warning. Demand for terminals fluctuates, and industry competition intensifies.