Introduction to this report:
Industry demand is under pressure in the short term, and the sharp increase in cost ratios is dragging down performance. We expect new channels and new business contributions to increase prudently.
Key points of investment:
Considering that industry demand is still slowly recovering weakly, and market competition is fierce. We lowered our profit forecast. In 2024-2026, EPS is expected to be 1.76/1.92/2.04 yuan (original value 1.84/2.01/2.14 yuan, adjusted -6%/-5%), +5%/+7% year-on-year, referring to comparable companies in the same industry, and based on the principle of prudence, we will give our subsidiary 18xPE in 2024, maintain a target price of 32 yuan, and maintain a “prudent increase” rating.
Performance summary: The company's performance fell short of expectations. The company's 2024Q1 revenue was 127 million yuan, a net of 45% year on year, and net profit to mother of 05 billion yuan, -89% year on year.
Sales in the integrated stove industry are sluggish, and the company's revenue is under pressure in the short term. 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. The company was affected by the Spring Festival holiday. The January vacation period was longer, and the actual working hours were shortened. At the same time, there is less traffic in the building materials market, and the company's offline specialty store channels have been greatly affected, and Q1 revenue performance is under pressure. The company is responding quickly to market changes and launching the Douyin project in the same city to enhance online sales, which is expected to hedge against the downward pressure on some industries. At the performance level, Q1's gross margin was 4.84 pct year on year, and net margin was 14.25 pct year on year; sales, management, R&D, and financial expense ratios were +9.94, +4.19, +1.75, and +0.4 pct, respectively. Under pressure on the sales side, long-term fixed cost investment led to an increase in the overall cost ratio.
Looking ahead to 2024, the company's online business continues to expand, and the growth rate of the main business is expected to pick up in the future. At the same time, with the smooth expansion of the wholly-owned subsidiary Yixan Intelligent Business, it is expected to contribute new volume.
Risk warning: the risk of raw material price fluctuations and increased market competition.