23 Net profit to mother achieved double-digit growth for the full year, and net profit remained positive in 24Q1. The company released its 23rd annual report and 24Q1 financial report. It achieved revenue of 11.02 billion yuan for the full year of '23, an increase of 9.06% over the previous year, and realized net profit of 1,732 billion yuan, an increase of 10.20% over the previous year. After deducting non-net profit, it reached 1,583 billion yuan, an increase of 7.06% over the previous year. Among them, 23Q4 and 24Q1 achieved revenue of $32.69 billion and 2.237 billion, respectively, up 7.71% and 2.75% year on year, and net profit to mother of $3.60 billion and 398 million yuan respectively, up 6.18% and 2.49% year on year.
In 2023, the company plans to pay a dividend of 0.5 yuan/share to all shares, corresponding to the current share price with a dividend rate of 2.0%.
Smoke stoves have been growing steadily for 23 years, and integrated dishwasher stoves have continued to expand. By business, in 2023, the company's first category range of range hood/ gas stove/ sterilizer achieved revenue of 53.2/2.67 billion yuan, respectively, an increase of 10%/9%/-2% over the previous year. The second category of all-in-one machines/steamers/ovens achieved revenue of 6.9/0.7/0.7 billion yuan respectively, a year-on-year decrease of 7%/32%/12%. Looking at other categories, dishwashers and integrated stoves achieved relatively good growth, achieving revenue scales of 760 million yuan and 460 million yuan respectively, an increase of 28%/21% year-on-year. The gross margins of the company's smoke machines and gas stoves reached 53.99% and 55.77% respectively, an increase of 2.26 and 1.1 pct over the previous year. Referring to Aowei's data, the market share of the company's offline retail sales for range hoods/gas stove/integrated steamer reached 31%/30%/31%/20%, respectively; in terms of online retail sales, the market share of smoke stove packages/kitchen appliance packages/hood machines/gas stoves was 33%/31%/18%/12%, respectively, and the market share of the boss brand in terms of hardcover channels reached 32%, ranking first in the industry.
The company launched the 2024 Stock Option Incentive Plan and the second phase of the Business Partner Shareholding Plan. The total number of stock options to be granted under the company's options incentive plan is 5.75 million shares, accounting for about 0.61% of the company's total share capital. The exercise price is 18.92 yuan/share, and the number of incentives reached 341 people (middle management and core technical (business) backbone). The assessment was based on revenue for 23 years. The target compound growth rate for 24/25/26 reached 10% (trigger value was 5%), and the overall amortization expenses for 24-27 reached 35.95 million yuan.
The second phase of the company's business partner shareholding plan includes the company's core management personnel, including directors (excluding independent directors), general managers, deputy general managers, senior directors, directors, etc. The assessment is based on revenue for 23 years, and the target compound growth rate for 24/25/26 is 10% (trigger value is 5%). At the same time, the net profit deducted for the year is not less than the non-net profit deducted from the mother for the year 2023.
Investment advice and profit forecasting. As a leading kitchen appliance brand, the company has a perfect channel layout. In the short term, the real estate boom affects its own business growth rate, but in the long run, we judge that the company's position in the main category market is stable, and the new category is expected to continue to increase its business scale with brand and channel collaboration. We expect the company's net profit growth rate to reach 7.5%/7.4% 7.1% in 24-26, and EPS of 1.96/2.11/2.26 yuan per share, giving the company a 2024 13x-16xPE valuation, corresponding to a reasonable value range of 25.48-31.36, maintaining a “superior to market” rating.
Risk warning: Terminal demand is unanticipated, and raw material prices fluctuate.