The company released its 2023 annual report and 2024 quarterly report
24Q1 revenue of 550 million, +31% year on year, net profit to mother of 120 million, +58% year on year, net profit after deducting non-return to mother 110 million, +83% year on year
23Q4 revenue of 470 million yuan, +32.0% year on year, net profit attributable to mother of 84.83 million, +9.2% year on year, net profit after deducting non-return to mother of 74.65 million, +22.4% year on year;
Revenue for 23 years was $1.92 billion, +31.4% year on year, net profit to mother of 410 million, +21.8% year on year, net profit after deducting non-return to mother 360 million, +23.1% year on year; the company began inventory replenishment in '23, and the transaction amount for TOP10 customers (except for one non-US customer) increased by 4.2%-654%.
In '23, the company's cumulative cash dividend was 128 million, with a dividend ratio of 31%; at the end of the year, 3 shares were transferred to all shareholders for every 10 shares by transferring capital reserves to increase the share capital, which is expected to increase 38.4 million shares.
By product, the revenue of electric sofas in '23 was 1.43 billion, +46.3% year-on-year, with volume/price +39.1%/+5.2% year-on-year, respectively, and gross profit margin of 33.0%, or -1.0pct year on year;
Electric beds were 290 million, +5.0% year over year, of which volume/price was -3.0%/+8.2% year over year, respectively, gross profit margin 36.7%, and +3.5pct year over year.
Strong product strength, accelerated expansion of customer resources
The top ten 24Q1 customers were all US customers (70% were retailers). Most of them increased their transaction value with the company from 1.71% to 513.88%, and 4 of these customers increased by more than 50%.
The company's customer resources expanded at an accelerated pace. In '23/24Q1, it received 34/24 new customers (32/24 retailers), of which 5/2 were among the “Top 100 Furniture Retailers in the U.S.” The company's product design, function, appearance, quality and service were recognized by customers, and most of the new customers were recommended and referred by existing customers.
New product development continues to empower retail customers. MotoLiving products began shipping at the end of August 23 and entered retail stores at the end of October and beginning of November of that year; new products exhibited in October 23 and January 24, plus time for technical review and raw material preparation of new products, began to be shipped only in late December '23 and early '24. By the end of March '24, the company had received orders from 45 customers worth tens of millions of dollars for MotoLiving.
Large showrooms & elevator advertisements accelerated brand exposure. In-store stores opened OBM growth space. The company saw the significance of continuing to participate in the exhibition in Las Vegas and the need to expand the showroom area and enhance the image of the showroom. In response to customer reviews, the company began planning to expand the Las Vegas showroom after two Las Vegas exhibitions (January and July); in January '24, after nearly a year of hard communication and nearly two months of preparation, the company successfully moved into the new Las Vegas showroom (B800), which is three times larger (more than 1,500 square meters), which is more convenient for display and furnishings Arrived The escalator is also in the closest position to the elevator, instantly enhancing the image of the showroom, company and brand.
Recently, Gaodian Exhibition Company did targeted outdoor advertising. After several years of waiting in line, Gaodian Exhibition Company got the opportunity to advertise elevator interior in April '24, which we believe is conducive to further strengthening publicity within the industry.
In addition, the company will continue to visit more retail stores in the future to learn about the sales and on-site display of MOTO products, and promptly test and verify the initial results of brand building. The company expects Q2 and Q3 brand building results to be shown in the market. We expect that store-to-store promotion will open up room for valuation and growth.
Promote cost reduction and efficiency, and continue to improve profitability
The 24Q1 gross profit margin was 33%, +3pct year on year, net profit margin 22%, +4pct year on year; in '23, the company's gross profit margin was 34.0%, +1.4pct year on year, net profit margin 21.2%, and -1.6 pct year on year. Furthermore, the company is increasing the manufacturing capacity of its production base in Vietnam and strengthening supply chain, transportation and warehousing management capabilities to reduce risks such as tariffs and policies.
Adjust profit forecasts to maintain “buy” ratings
The company's new products+new customers+new brands worked simultaneously in '24. Considering the high increase in performance and good order conditions in '23, we adjusted our profit forecast. We expect the return for 24-26 to be 490,000/60 million/710 million (24-25 years ago, respectively), and the corresponding PE is 19X/15X/13X respectively, maintaining a “buy” rating.
Risk warning: In-store expansion falls short of expectations, sales share of major customers falls short of expectations, sales expenses increase, overseas demand falls short of expectations, etc.