Core views

The company released its 2024 quarterly report, and achieved revenue of 2,562 billion yuan in 24Q1, an increase of 54.18% over the previous year. All categories showed a strong growth trend. Q1 achieved a gross profit margin of 30.48%, a year-on-year increase of 2.26pct, a net profit margin of 5.53%, and a significant increase of 5.48pct year-on-year.

24Q1 achieved net profit attributable to the parent company of 136 million yuan, an increase of 675.34% over the previous year. On the revenue side, all categories of the company, including two-wheelers, all-terrain vehicles, lawnmower robots, etc., achieved outstanding performance in the first quarter of '24. The inflection point of the company's profit has been reached, and profit flexibility has been unleashed.

occurrences

The company released its 2024 quarterly report.

24Q1 achieved operating income of 2,562 billion yuan, a year-on-year increase of 54.18%, achieved net profit attributable to shareholders of the parent company of 136 million yuan, an increase of 675.34% year-on-year, and realized net profit of 142 million yuan after deducting non-recurring profit and loss, and an increase of 16874.37% over the previous year.

From a profit perspective, the company achieved a gross profit margin of 30.48% in 24Q1, an increase of 2.26pct over the previous year, a net profit margin of 5.53%, and a significant increase of 5.48pct over the previous year.

Brief review

1. Revenue level: All categories have achieved outstanding performance

The company's 24Q1 revenue increased sharply year on year, and all categories of the company performed well. Looking at the split business: 1) Electric two-wheeler sales volume was 416,900 units, up 126% year on year, sales revenue 1.19 billion yuan, up 119 percent year on year, and the average bicycle price was 2,854 yuan, down slightly year on year. As of April 18, the number of electric two-wheeler stores had exceeded 5,400; 2) Self-branded retail scooters achieved sales volume of 151,700 units, up 21% year on year; 3) Lawnmower robots achieved sales volume of 33,300 units, up 317% year on year, achieving sales revenue of 180 million yuan, up 267% year on year; 4) All-terrain vehicle sales reached 5,487 units, up 94% year on year, and achieved revenue of 215 million yuan, up 90% year on year.

II. Profitability

From the perspective of gross margin, the company's 24Q1 gross profit margin was 30.48%, an increase of 2.26pct over the previous year. The overall increase was significant. The reasons for the analysis are mainly related to the further release of the scale effect of the two-wheeler business and the further expansion of smart lawnmowers and all-terrain vehicles.

From the perspective of cost ratio, 24Q1 company's sales/management/R&D/finance expense ratios were +0.4%/-1.15%/-1.25%/-2.19%, respectively. Apart from a slight increase in sales expenses, all other expense ratios benefited from a significant increase in the company's revenue, and pressure dropped to varying degrees.

From a net profit perspective, the 24Q1 company achieved net profit of 136 million yuan, a year-on-year increase of 675.34%, a year-on-year increase of 5.48pct, a year-on-year increase of 5.48pct, a year-on-year increase of 5.29%, and a year-on-year increase of 4.24pct. Thanks to the company's large volume in various categories, gross margin continued to increase, and various expense ratios continued to drop, and overall profit improvement was significant.

Investment advice: We expect the company to achieve operating income of 132.89, 16.611, and 19.033 billion yuan respectively in 24-26, with year-on-year increases of 30%, 25%, and 20%; net profit attributable to the parent company of 734, 9.38, and 1,173 billion yuan, respectively, with a year-on-year increase of 22.77%, 27.73%, and 25.08%, respectively. Optimistic about the company's development of all categories at home and abroad, and maintaining a buying rating.

Risk warning:

1) Technology research and development risks: The manufacturing industry of intelligent short-range mobile devices and service consumer robots is a technology-intensive industry. The company has formed a mature technological innovation mechanism, a continuous R&D cost investment mechanism, and strong R&D innovation capabilities, which help the company develop new products with leading performance and meet market needs. However, the diversity of industry customers and the innovation of industry technology have increased uncertainties in the company's new technology and product development process to a certain extent, leading to a long cycle of revenue generation from R&D to commissioning. Since the company needs to invest a large amount of manpower and capital in the process of developing a new product, if the development of a new technology or product fails or does not meet market requirements after development is completed, the costs invested by the company in the early stages will not be recovered, which will adversely affect the company's operations.

2) Risk of loss of key technical talents: As a technology-intensive industry, technical talents are a key factor in determining the competitiveness of the industry, and competition for technical talents will continue to intensify. If the company loses a large number of key technical talents due to remuneration or other reasons, or if the company is unable to motivate existing technical talents or attract outstanding technical talents, the company may experience insufficient technical team allocation, so it cannot continue to develop and sell new products and provide customers with high-quality services. The company may also face higher recruitment and training costs, which may adversely affect the company's technical research and development capabilities and business performance.

3) Risk that the expansion of new categories falls short of expectations: At this stage, the company needs to rely on the continuous development of categories such as all-terrain vehicles and smart lawnmowers to drive revenue growth and profit improvement. If overseas sales and channel expansion of the next two categories fall short of expectations, it will put pressure on the company's operations or performance to a certain extent.