Considering that demand in the industry is slowly recovering weakly and competition is relatively intense. We lowered our profit forecast. The company's 2024-2026 EPS is expected to be 1.09/1.18/1.27 yuan (original value 1.11/1.20/1.28 yuan, adjusted -2%/-1%), +6%/+8% compared to the same period. Referring to comparable companies in the same industry, and based on the principle of prudence, we will give the company 16x PE in 2024, lower the target price to 17.4 yuan, and maintain the “gain” rating.
Performance summary: The company's performance fell short of expectations. The company's 2024Q1 revenue was 117 million yuan (-33%), and net profit to mother was 0.2 billion yuan (-45%).
Industry demand is under pressure, and the share of the company's category structure has changed. From an industry perspective, the average price of the integrated stove category is high, increasing the purchasing threshold for consumers. As consumer purchasing power slowly recovers, overall sales are relatively sluggish. From a corporate perspective, under pressure on the demand side, we expect the company's overall revenue structure to change, and the share of lower-priced sterilizer models will increase, leading to a decline in the overall average price. The company's disinfection cabinet is expected to account for about 45% in 2024Q1, +20pct to 25pct year-on-year. At the performance level, 2024Q1's gross margin was -3.12pct yoy, and the net margin was -3.94pct yoy. It is expected that under pressure on the sales side, the decline in the average price of the company is an important reason for the decline in gross margin. The company's 2024Q1 sales, management, R&D and financial expense ratios were +4.13, +4.77, +1.02, and -6.86pct, respectively. Under pressure on the sales side, long-term fixed cost investment increased the overall sales and management expense ratio.
Looking ahead to 2024, as one of the leaders in the integrated stove industry, the company has a relatively mature channel layout, and the overall performance is expected to outperform the industry as a whole.
Risk warning: There is a risk of fluctuations in raw material prices and increased market competition.