The company released its 2023 annual report and 2014 quarterly report

24Q1 revenue was 403 million yuan, up 15.9%; net profit attributable to mother was 0.13 billion yuan, up 5.4%; after deducting non-return to mother, an increase of 426.1%;

23Q4 revenue of 638 million yuan, a decrease of 9.1%; net profit attributable to mother was 39 million yuan, a decrease of 22.4%; deducted from non-return mother of 0.26 million yuan, a decrease of 48.9%;

23A revenue of 2,225 million yuan, a decrease of 19.8%; net profit attributable to mother was 217 million yuan, a decrease of 49.6%; deducted from non-return mother of 158 million yuan, a decrease of 36.3%.

The decline in results in '23 is mainly due to ① continuous adjustments in real estate and fluctuations in consumer confidence. The terminal retail market is still recovering ② Hubei Qianchuan shares were transferred during the same period in '22, which confirmed a large return on investment.

Due to the fact that Hubei Qianchuan will no longer be consolidated on July 1, 2022, there is a difference in the year-on-year operating data of the company's consolidated statement for 2023. Excluding Hubei Qianchuan's consolidated profit and loss and repurchases for the first half of 2022. In 2023, Hollywood's own revenue decreased by 10.52%, net profit to mother decreased by 7.84%, and deducted from non-return mother by 31.57%

In 2023, the company plans to distribute 65.3696 million yuan (tax included), with a dividend rate of 30.09%.

By category, overall wardrobe revenue was 1.67 billion yuan, down 12.5%, gross profit margin 38.9%, same increase of 0.2 pct; cabinet revenue was 296 million yuan, up 2.9%, gross profit margin 26.1%, same decrease of 0.7 cpt; wooden door revenue was 90 million yuan, down 72.4%, gross profit margin 24.9%, same decrease 10.0 pct; finished product supporting revenue of 98 million yuan, same decrease of 16.3%, gross profit margin 20.5%, same decrease of 4.3 pct.

The gross profit margin for 23 years was 35.1%, a decrease of 0.1 pct; the net profit margin was 9.6%. In 2023, the company actively achieved cost reduction and efficiency through lean management, technological innovation, supply chain optimization, etc., thereby improving the quality of operations. On the one hand, the company effectively controls procurement costs through strategies such as resource integration, business alliances, strategic inventory, and centralized procurement. On the other hand, through digital transformation and fine management, the MES intelligent manufacturing system is continuously iteratively upgraded to introduce lean production concepts, eliminate ineffective or inefficient links, reduce waste, and help improve supply chain operation efficiency.

In order to open up efficient collaboration throughout the chain, the company's key R&D, production and marketing teams collaborated with third-party expertise to fully implement IPD to optimize product development processes, improve product quality and speed of launch, and ensure that products better meet market needs. The whole process management from market analysis, product planning, design, verification to production forms a process and standard mechanism for new product development and marketing management.

The retail business continues to develop in new channels such as handbags, personalized home improvement, art decoration, new retail, foreign trade, etc. The company continues to invest more in retail channels and brand building, continues to promote urban operation platform model encryption outlets in leading markets, and actively explores the sinking market to cover empty cities, and continues to gain strength in new channels such as bags, personalized home improvement, art decoration, new retail, and foreign trade.

In 2023, Hollywood will accelerate its global strategy and continue to expand its overseas footprint. The new layout of Hollywood stores will be located in 9 cities in 7 countries, including Malaysia, Singapore, Oman, Dubai, Canada, Panama, and Australia, to provide global consumers with a more diverse and personalized lifestyle, and penetrate the original concept of Hollywood's original concept around the world, so that the world can see the power of customized Chinese homes and experience China's new quality of productivity.

As an important supplementary channel for the company, the company's complete assembly business achieved a year-on-year increase in business scale by more than 70% in 2023. The company quickly promoted through multiple methods such as organizational restructuring, product empowerment, and benchmarking, and laid out various business models such as direct-run home improvement, artistic decoration, and dealer home improvement according to channels and business attributes. In terms of direct home decoration, in 2023, the company accelerated cooperation with many leading equipment companies, such as the new retail brand Full House Furniture Research and Selection, to co-create a new assembly ecosystem through resource integration and complementary advantages. The company empowers partners in all six dimensions, including marketing, operation, delivery, traffic, technology, and industry, to provide integrated overall home service solutions for thousands of families across the country; in terms of art decoration, the company held the first National Dealer Summit of Hollywood Art Furnishing in 2023 to clarify the strategic direction and business strategy of Holike Art Furnishing, and also invited excellent home decoration dealer representatives Share practical cases, empower dealers in all aspects, and help the company's entire channel maintain performance growth.

Adjust profit forecasts to maintain “gain” rating

Hollywood is a home customization company that integrates design, R&D, production and sales, and is committed to providing consumers with overall solutions for the whole house. The company provides a variety of products and services. The main products include but are not limited to the overall wardrobe, the overall closet, the overall bookcase, the overall TV cabinet, the overall wine cabinet, tatami, the overall kitchen, custom wooden doors, custom windows, balconies and other supporting products to meet the comprehensive needs of consumers in various aspects such as customized design, space utilization, and functionality throughout the house. Considering that the terminal retail market is still recovering, we adjusted our profit forecast. We expect the company's net profit to be 1.9/23/30 million yuan respectively in 24-26 years (36/4.1 billion yuan in 24-25 years ago), EPS of 0.61/0.75/0.95 yuan/share, respectively, and the corresponding PE is 14/12/9x, respectively.

Risk warning: risk of market changes; risk of increased market competition risk and potential price war risk; risk of raw material price fluctuation; risk of seasonal fluctuation; risk of management; risk of overcapacity, etc.