Key points of investment:

Considering that the company's new products are being invested, while consumer demand is slowly recovering weakly, cost investment efficiency has decreased, putting pressure on profit margins to a certain extent. We lowered 2024-2025 and added a profit forecast for 2026. The company's 2024-2026 EPS is estimated to be 0.41/0.53/0.68 yuan (2024-2025 original value 0.58/0.73 yuan, amplitude modulation -0.17/-0.20 yuan), +74%/+28% year-on-year, referring to companies in the same industry, and based on prudent considerations, the company will be given 33x PE in 2024, and the target price will be lowered to 14 yuan to maintain the “gain” rating.

Performance summary: The company's performance is in line with expectations. The company's 2023 revenue was 3.153 billion yuan (-5%), net profit not attributable to mother was 109 million yuan (-43%), net profit not returned to mother was 100 million yuan (-44%); 2023Q4 revenue was 882 million yuan (-12%), net profit to mother was 0.09 million yuan (-90%); the company's 2024Q1 revenue was 716 million yuan (+8%), net profit attributable to mother was 0.23 million yuan (+1%), net profit not attributable to mother.

Domestic sales margins have improved, and export sales have maintained a growth trend. In 2023, the company's domestic sales business was -10% year-on-year, and the export sales business was +30% year-on-year. Split to H2, domestic sales business -16% year-on-year, and export sales +20% year-on-year. At the same time, we expect the company's domestic and export sales business to achieve single-digit year-on-year growth in 2024Q1. In terms of domestic sales, the overall domestic small household appliance industry was in the process of slow and weak recovery in 2023, and the overall demand side was relatively weak. At the company level, the company suspended the Vantage business in 2023, and the ODM business declined, causing the company's domestic sales to decline.

Looking ahead to 2024, the company is actively exploring overseas markets. New domestic products will continue to provide new volume, and it is expected to continue to grow in the future.

Risk warning: There is a risk of fluctuations in raw material prices and increased market competition.