Event: Gold Medal Kitchen Cabinet released its 2023 Annual Report and 2024 Quarterly Report. In 2023, the company achieved operating income of 3,645 billion yuan, an increase of 2.59%; net profit to mother was 292 million yuan, an increase of 5.40% year on year; net profit after deduction was 234 million yuan, an increase of 22.15% year on year. 23Q4 achieved operating income of 1,098 million yuan, up 3.17% year on year; net profit to mother was 126 million yuan, up 11.77% year on year; net profit after deduction was 124 million yuan, up 30.52% year on year. The 24Q1 company achieved operating income of 641 million yuan, an increase of 11.45% year on year; net profit to mother was 36 million yuan, up 11.16% year on year; net profit after deduction was 0.14 billion yuan, up 8.24% year on year.
The multi-category layout is gradually improving, and the overseas growth rate is beautiful
By product, the company's overall kitchen cabinet/ overall wardrobe/ wooden door achieved revenue of 22.32/10.44/246 million yuan, year-on-year change of -5.55%/+8.65%/+64.97% year-on-year, and the company 24Q1 overall kitchen cabinet/overall wardrobe/ wooden door achieved revenue of 3.89/1.90/ 0.25 billion yuan, a year-on-year change of +7.63%/+19.91%/-14.88%. The kitchen cabinet business remained basically stable, and the wardrobe and wooden door business maintained relatively rapid growth. Through the layout of a multi-category strategy, the company gradually developed from independent single-category operation to multi-category integration, continuously improving overall home solutions to provide users with a more convenient and comfortable one-stop customized experience for the whole family.
By channel, the company achieved revenue of 18.81/0.96/12.76/274 billion yuan in dealership/direct store/bulk business/overseas in 23 years, a year-on-year change of +2.58%/-24.05%/-0.29%/+16.92%, 24Q1 dealer/ direct-run store/ bulk business/ overseas revenue of 2.86/0.05/2.34/ 81 billion yuan, year-on-year change of -5.32%/-65.34%/+24.73%/+68.23%. This is due to the conversion of some direct-run stores into dealerships; the increase in revenue from overseas channels is mainly increasing the expansion of the North American and Australian markets. Among them, judging from the business development model, the North American market continues to promote the expansion of RTA distributors, and they always cooperate to speed up the signing and implementation of engineering projects; the Australian market continues to achieve further breakthroughs in the market through the engineering subcontract model.
Profitability remains steady, and the results of cost reduction and efficiency are obvious
In terms of profitability, the company's gross margin in '23 was 29.58%, up 0.12pct year over year. The gross margin of the 23Q4 company was 31.16%, a year-on-year decrease of 0.58pct. In 24Q1, the company's gross margin was 28.01%, down 1.11pct year-on-year. Our analysis showed that the increase in the company's gross profit in '23 was mainly due to the decline in raw material prices compared to the same period and the company's cost reduction and efficiency results.
In terms of period expenses, the company's expenses rate for the 23-year period was 22.81%, up 0.56pct year on year, and the sales/management/R&D/finance expenses ratio was 12.03%/4.67%/6.20%/-0.09%, respectively, and -0.11/-0.03/+0.13pct, respectively. Among them, R&D expenses increased, mainly due to the company deepening implementation of integrated R&D management concepts and continuing to increase R&D investment. The 24Q1 company's expense ratio was 25.17%, down 1.44pct year on year, and the sales/management/R&D/finance expenses ratio was 13.29%/6.27%/5.34%/0.27%, respectively, and -1.25/-0.32/-0.47/+0.59pct, respectively.
Under the combined influence, the company's net interest rate in '23 was 7.95%, up 0.28pct year on year; in 23Q4, the company's net interest rate was 11.53%, up 1.10pct year on year. The 24Q1 net profit margin was 5.44%, a year-on-year decrease of 0.03pct.
Investment advice: The company actively promotes digital transformation and upgrading, making comprehensive efforts in multiple channels and categories, and growing rapidly in closets and wooden doors. We expect the company's revenue for 2024-2026 to be 41.13, 4.751, 5.282 billion yuan, up 12.82%, 15.51%, 11.17% year on year, and net profit to mother of 3.12, 3.60, 414 million yuan, up 6.93%, 15.41%, 14.96% year on year. Corresponding PE is 10.9x, 9.5x, and 8.2x. The corresponding PE is 10.9x, 9.5x, and 8.2x, giving a 24-year 17.19xPE with a target price of 34.80 yuan, maintaining a buy-A investment rating.
Risk warning: Market competition increases risk; risk of channel category expansion falling short of expectations; risk of rising raw material prices.