The company released its annual report for the year 23 and the quarterly report for the year 24

24Q1 revenue was 360 million, up 2%; net profit attributable to mother was 0.21 million, down 6.1%; net profit from non-return to mother was 0.28 million, up 51%; 23A company's revenue was 1.1 billion, down 21%, and net profit due to mother was 0.17 billion, down 71%; after deducting net profit from non-return mother, it was 0.3 million yuan, a decrease of 71%; of these, 23Q4 revenue was 200 million, net profit to mother decreased by 25%.

The decline in performance in 2023 is 1. Downstream customer demand falls short of expectations, backlog inventory has not been fully digested, and industry competition has intensified, leading to a decrease in the company's sales revenue; 2. Continuing to strengthen overseas business expansion, adding sales, warehousing, logistics and after-sales service agencies in major sales regions in Europe and the US, leading to an increase in sales expenses; 3. In order to cope with the uncertainty of the future business environment, enhance management capabilities, formulate future development strategies, introduce external consulting agencies, and talents such as high-end management R&D technology sales, etc.

In 2023, the company plans to distribute a cash dividend of 7.7 million yuan (after tax), with a dividend rate of 46%; by product, revenue from shading products in 23 years was 940 million, up 3.6%, gross profit margin 24.8%, and 3.6 pct; leisure furniture revenue was 90 million yuan, up 4%; the company's main raw materials were aluminum, steel and fabric, mainly export sales. The average 23A exchange rate increased 4.77%; in terms of bulk raw materials, the cost of aluminum, steel, and cloth decreased slightly; in terms of bulk raw materials, the cost of aluminum, steel, and cloth decreased slightly; Promote lean production, Accelerate digital construction, optimize production processes and processes, and improve production efficiency, leading to an increase in overall product gross margin in 2023.

By region, export sales were 1 billion yuan in '23, a decrease of 21%, gross profit margin of 24.6%, and an increase of 3 pcts; domestic sales of 80 billion, a decrease of 23%, gross profit margin of 20%, and an increase of 5.7 pcts.

By model, e-commerce revenue in '23 was 240 million, up 0.1%, gross profit margin was 32%, and the same increase was 2 pcts; offline, it was 850 million, down 26%, gross profit margin was 22%, and the same increase was 3 pcts.

The company's 24Q1 gross profit margin was 26%, an increase of about 1.5pct, and the net profit margin was 6%, which was basically the same.

The company has a high level of technology development and strong product development capabilities. The company won the “Red Dot Award”, known as the international Oscar in the design industry, 5 times from 2013 to 2021, and has become one of the companies that has won many awards in the domestic outdoor leisure furniture and supplies industry. In order to grasp market trends in a timely manner, the company set up an R&D and design center in Shanghai; the starry sky tent product developed by the company's R&D team won the “Red Dot Award” in 2020, and the starry sky tent has also become the company's hot product in recent years, contributing a new growth point to the company's revenue and profit. Continuous R&D and design capabilities have significantly enhanced the company's industry reputation and brand awareness, providing a strong guarantee for the company's market development.

Gradually unleash the advantages of sales channels

The company has established a relatively complete marketing channel and service network in major markets such as Europe and America, and has formed stable cooperative relationships with various customers such as large supermarket chains and brands. The company's subsidiaries in Europe and America can help the company develop regional markets, provide customers with timely demand response and convenient service guarantees, and facilitate the long-term stable development of the company in the European and American markets. The company has been certified as a qualified supplier for customers of large supermarket chains such as Walmart and Costco.

Furthermore, the company is vigorously developing cross-border e-commerce. Products related to its own brands “ABBA PATIO,” “SORARA,” “GARDENSOL,” and “MIRADOR” are sold in the US and Europe through e-commerce platforms such as Amazon and Wayfair, expanding its influence in overseas markets.

It has the advantages of digitalization and large-scale production

The large-scale benefits of the outdoor leisure furniture and supplies industry are quite obvious. After years of accumulation, the company's large-scale production advantage has been formed, and the construction of vertically integrated production lines has begun to take shape, providing a strong guarantee for enterprise market development, supply chain management, and production and operation management. Large-scale and digital production can effectively reduce raw material procurement costs and product manufacturing costs, thereby reducing the company's product costs.

Update profit forecasts and maintain “gain” ratings

The company operates a general trade model centered on KA customers combined with a cross-border e-commerce self-operated model. General trade model: with customer orders as the core to achieve rapid delivery and meet customer needs through vertical integrated management of R&D, procurement, production and sales; cross-border e-commerce model: with overseas sales companies as the core, predicting product sales trends and independently planning production plans, warehousing, logistics and delivery according to market sales conditions. We estimate that the company's net profit for 24-26 will be 1.11/135/161 million yuan, EPS will be 1.01/1.23/1.46 yuan/share, respectively, and the corresponding PE will be 22/18/15x, respectively.

Risk warning: market competition risk; exchange rate fluctuation risk; intellectual property infringement risk; raw material price fluctuation risk.