Core views
The company released its 2024 quarterly report, and achieved operating revenue of 160 million yuan in 24Q1, a year-on-year decline of 6.5%. The year-on-year decline on the revenue side was mainly affected by high pressure on the short-term domestic sales environment. Overseas OEMs and independent brands all performed well. 24Q1 achieved net profit attributable to the parent company of 0.23 million yuan, an increase of 28.3% over the previous year. Net profit attributable to the parent company after deducting non-recurring profit and loss was 21 million yuan, an increase of 29% over the same period, a gross profit margin of 49.7%, a year-on-year decrease of 2 pct, and a net interest rate of 14.2 pcts, an increase of 3.8 pct over the previous year. The profit side showed impressive performance.
occurrences
The company released its 2024 quarterly report.
24Q1 achieved operating income of 160 million yuan, a year-on-year decrease of 6.5%, achieved net profit attributable to shareholders of the parent company of 223 million yuan, an increase of 28.3% over the previous year, and realized net profit after deducting non-recurring profit and loss of 121 million yuan, an increase of 29% over the previous year.
From a profit perspective, the company achieved a gross profit margin of 49.7% in 24Q1, a year-on-year decrease of 2 pcts, a net profit margin of 14.2%, and a year-on-year increase of 3.8 pcts.
Brief review
I. Revenue level: Overseas OBM business performed well
The company's 24Q1 revenue fell 6.52% year on year. Looking at the split business: 1) The independent brand Beiding achieved revenue of 122 million yuan, a year-on-year decrease of 14.37%;
Looking at the breakdown, the domestic independent brand business was affected by relatively weak domestic demand (the company's high-end price segment is also expected to be greatly affected), down 17.30% year on year, and overseas independent brand business revenue increased 28.23% year on year, maintaining a high year-on-year growth rate under a low base; 2) Outside of the independent brand business, the company's OEM/ODM business revenue increased 32.51% year on year at a low base last year.
II. Profitability
From a gross margin perspective, the company's 24Q1 gross profit margin was 49.7%, down 2.0pct year-on-year, and overall decline. According to the analysis, it is estimated that it is mainly related to changes in the company's business structure, that is, OEM/ODM with lower profitability and an increase in the share of overseas independent brand business.
From the perspective of cost ratio, 24Q1 company's sales/management/R&D expenses ratio was -3.3%/-0.01%/-0.54%, respectively. Apart from the influence of factors changing the business structure, the overall cost control effect of the company was also quite obvious.
From a net profit perspective, 24Q1 achieved net profit of 23 million yuan, a year-on-year increase of 28.25%, a net interest rate of 14.18%, a year-on-year increase of 3.84pct, a year-on-year increase of 13.01%, and an increase of 3.59 pcts year-on-year.
Investment advice: We expect the company to achieve operating income of 738, 812, and 885 million yuan respectively in 24-26, with year-on-year increases of 11%, 10%, and 10%; net profit attributable to the parent company of 0.80, 0.93, and 108 million yuan, respectively, with year-on-year increases of 12.31%, 16.49%, and 15.67%, respectively. We are optimistic about the future expansion of the company's own brands in domestic and foreign markets, and maintain an increase in holdings rating.
Risk warning:
1) Risk of fluctuations in raw material prices: The company's main raw materials include electronic components, hardware raw materials and hardware products, plastic raw materials, plastic and glass products, packaging materials, etc. Changes in the prices of major raw materials will cause the company's raw material procurement costs to fluctuate, which will have a certain impact on the company's cost control.
2) Risk of exchange rate fluctuations: In recent years, the degree of marketization of China's exchange rate has continued to increase, and exchange rate flexibility has continued to increase. As the degree of internationalization of the RMB gradually increases, the reduction of China's intervention measures in the money market may increase the two-way fluctuation of the RMB exchange rate. The company's overseas sales are mainly settled in US dollars. At the same time, imported raw materials are mainly settled in US dollars and Hong Kong dollars. Fluctuations in the RMB exchange rate will have an uncertain impact on the company's performance.
3) Risk of market competition: In full market competition, if the company cannot continue to maintain stable product quality and advanced technology, launch innovative products in a timely manner, and provide high-quality services, the company will face greater risk of market competition. Furthermore, it is not ruled out that some less competitive enterprises sell through improper competitive methods such as suboptimal or even fraudulent use of the company's brand. These improper competitive practices will adversely affect the company's brand, which in turn affects the company's operating performance.