Core views
The company released its 2024 quarterly report. In 24Q1, revenue of 852 million yuan was achieved, a year-on-year decrease of 4.34%, and short-term order revenue was under pressure. Q1 achieved gross profit margin of 27.49%, a year-on-year increase of 0.36pct, a net profit margin of 11.47%, and a year-on-year decrease of 1.03pct. 24Q1 achieved net profit attributable to the parent company of 115 million yuan, a year-on-year decrease of 1.67%. The company's short-term order revenue was under pressure, but the medium- to long-term growth logic remained unchanged. The future volume of categories such as refrigerators, smart cabinets, supermarket cabinets, etc., and the continued development of overseas markets will bring considerable room for long-term growth for the company.
occurrences
The company released its 2024 quarterly report.
24Q1 achieved operating income of 852 million yuan, a year-on-year decrease of 4.34%. Net profit attributable to shareholders of the parent company was 115 million yuan, a year-on-year decrease of 1.67%, and net profit attributable to mother after deducting non-recurring profit and loss of 98 million yuan, a year-on-year decrease of 12.22%.
From a profit perspective, the company achieved gross profit margin of 27.49% in 24Q1, a year-on-year increase of 0.36pct, a net profit margin of 11.47%, and a year-on-year decrease of 1.03pct.
Brief review
1. Revenue level: Domestic sales were affected by weather factors, and there was short-term pressure. The company's 24Q1 revenue fell 4.34% year on year, and was under pressure in the short term. Let's break it down:
1) Domestic orders for the frozen category have been affected by the cold weather since the beginning of the year, and the pace of downstream customer sales continues to grow, but the year-on-year growth rate is expected to slow down at a higher base, which is expected to be in single digits; 2) In the refrigerated category, the export side showed good year-on-year growth under last year's low base, and the domestic sales side is also expected to show good growth performance under the low base of 23Q1.
II. Profitability
From the perspective of gross margin, the company's 24Q1 gross profit margin was 27.49%, an increase of 0.36 pct over the previous year, and there was a slight increase overall. Analyzing the reasons, it is expected that the main product structure has been optimized (the share of overseas orders has increased) and that the raw materials side has contributed.
From the perspective of cost ratio, 24Q1 company's sales/management/R&D/finance cost rates were +2.16%/+0.21%/-0.22%/-1.06%, respectively. Sales and management expenses increased significantly. It is expected to be mainly due to overseas market development and short-term team building factors.
From a net profit perspective, the 24Q1 company achieved net profit of 115 million yuan, a year-on-year decrease of 1.67%, a net interest rate of 11.47%, a year-on-year decrease of 1.03pct, a year-on-year increase of 13.53%, and an increase of 0.47pct year-on-year. The company's overall net interest rate remained stable.
Investment advice: We expect the company to achieve operating income of 34.61, 38.42, and 4.265 billion yuan respectively in 24-26, up 8%, 11%, and 11% year-on-year; achieve net profit attributable to the parent company of 4.40, 4.83, and 540 million yuan, respectively, with a year-on-year increase of 6.54%, 9.75%, and 11.75%, respectively. I am optimistic about the company's continued increase in the market share of refrigerated, intelligent, and supermarket cabinets and the continued development of overseas markets, and maintain the purchase rating.
Risk warning:
1) Market competition risk and risk of new products not being developed in a timely manner: The company focuses on R&D, production and sales of commercial display cases, and has grown into a strong competitor in the industry through specialized, differentiated and customized products. Currently, competition in the industry where the company is located is becoming increasingly intense. The industry where downstream customers are constantly introducing new marketing methods, and the demand for customization and differentiation of the company's products is even more urgent. If the company fails to keep abreast of changes in market demand and carry out effective new product development, it will affect the development of the company's business.
2) Risk of fluctuations in raw material prices: The company's main raw materials and key components include steel (mainly cold-rolled coils, PCM plates, etc.), isocyanates, composite polyether, compressors and glass doors. Among them, the purchase prices of steel, isocyanates, composite polyethers, and compressors are affected by commodity prices such as steel and crude oil, and fluctuate greatly. Once the prices of major raw materials and components fluctuate greatly, it will affect the stability of the company's business performance.
3) Risk of seasonal fluctuations in main products: The company's customers are mainly concentrated in the cold drink industry, the frozen food industry and the beverage industry. The terminal consumption of cold drinks and beverages is clearly seasonal, so the customer purchases commercial frozen and refrigerated display cases also show a certain seasonality. Normally, the first half of each year and the end of the year are the company's peak production and sales season, and July-October is the low production and sales season. Therefore, the company's business is affected by seasonal characteristics, and there are mainly the following risks: first, during the peak production season, there is a risk that production capacity will not be sufficient to meet customer needs; second, during the off-season, there is a risk that production capacity will be difficult to fully utilize.
4) Risk of relative concentration of customers: The top five customers in the company's main business account for a relatively large share of the total revenue. Although the company generally maintained the stability of major customers and expanded a number of new customers during the reporting period, changes in existing major customers will have a significant impact on the company's performance.