Description of the event
The company disclosed its annual report and quarterly report: 1). In 2023, it achieved operating income of 840 million yuan, an increase of 31.69% year on year; owned net profit of 106 million yuan, up 66.14% year on year; 2), 2024Q1 revenue of 223 million yuan, an increase of 46.39% year on year; and attributable net profit of about 28.67 million yuan, an increase of 152.12% year on year.
Incident comments
Downstream demand is strong. Thanks to improved energy efficiency standards for refrigerators in developed countries and regions and the upgrading of domestic refrigerator consumption structures, the vacuum insulation board market is in strong demand. Sales of products with energy efficiency grade C or above in the EU refrigerator market all increased by more than 50% year-on-year from January to October 2023. The strong trend of both supply and demand for energy-efficient refrigerators has created good structural opportunities for the vacuum insulation board industry. Furthermore, as the world's leading home appliance manufacturing base, China's direct and OEM export demand for energy-efficient refrigerators rose in 2023, driven by multiple favorable factors such as easing overseas inventories, shipping costs, falling raw materials, and devaluation of the RMB, further boosting the development of the vacuum insulation board industry. At the same time, built-in refrigerators, with their integrated design with cabinets, have improved the efficiency of kitchen space utilization and the beauty of home decoration style, brought users a new consumer experience, and became a new trend in the refrigerator market. In 2023, the share of retail sales of built-in refrigerators in the online and offline markets reached 17.6% and 36.7%, respectively.
Because vacuum insulation boards can effectively reduce the thickness of the refrigerator insulation layer and increase internal storage space, they are more widely used in high-capacity, thin-walled and embedded high-end refrigerator products.
Supported by the economic climate, the company's operations continued to exceed expectations. As far as the company is concerned, in 2023, the company's VIP board sales volume was 8.18 million square meters, up 35% year on year; VIP board gross profit margin was 33%, up more than 6 pcts year on year, mainly due to a decrease in raw material costs and natural gas costs. In addition, the current credit impairment loss in 2023 was 12.44 million yuan, an increase of 131% over the previous period, mainly due to the increase in the book balance of accounts receivable at the end of 2023 compared to the end of 2022, and the corresponding increase in bad debt provision accruals.
Looking at the full year of 2023 by quarter, with the acceleration of downstream demand, the company's production capacity expansion and overall capacity utilization rate. The year-on-year revenue growth rates for the four quarters of '23 were 1.5%, 30%, 54%, and 39%, respectively, respectively, and marked acceleration since Q2. Single-quarter results were 0.1, 0.3, 0.38, and 0.27 billion, respectively.
Looking at the 24Q1 single quarter, the downstream trend continued. The company's revenue in the single quarter increased 46% year on year, and even compared with the peak season 23Q4, the decline was not significant; at the same time, 24Q1's gross profit margin was 34.6%, which ushered in further improvement over the second half of 2023; in the end, net profit attributable to 24Q1 was about 28.67 million yuan, an increase of 152% year on year.
Looking ahead to 2024:1. On the VIP side, the market sentiment under the European bid upgrade is still accelerating, and new breakthroughs are expected in the Japanese and Korean markets. As far as the company is concerned, production and sales are currently at full capacity, and the construction of the new base in Anhui is going smoothly. It is expected that 24Q2 will be released, and the gradual release of production capacity is expected to contribute significantly to the company's performance increase in 2024. Within the entire industry, the company has accumulated strong technology, technology, and cost advantages, and can also take the lead in this boom cycle to achieve another shift in share through a greater pace of expansion. 2. The vacuum glass business is progressing steadily, and it is expected to gradually achieve the second growth curve performance.
The 2024-2025 performance is expected to be 160 million or 220 million, corresponding PE is 23 or 17 times, and the purchase rating.
Risk warning
1. VIP board penetration falls short of expectations; 2. Vacuum glass progress falls short of expectations.