Description of the event
The company disclosed annual and quarterly reports: In 2023, the company achieved revenue of 6.233 billion yuan, a year-on-year increase of 7.12%, net profit to mother of 447 million yuan, +212.50% year-on-year, and net profit after deducting 412 million yuan, an increase of 362.75% over the previous year. Among them, 2023Q4 achieved revenue of 1,802 billion yuan, an increase of 15.54% over the previous year, net profit of 88 million yuan, an increase of 163.64% over the previous year, and net profit after deducting non-return to mother of 66 million yuan, an increase of 137.95% over the previous year. At the same time, in 2023, the company will pay a cash dividend of 3 yuan for every 10 shares, for a total of 249 million cash dividends. The company achieved operating income of 1,381 billion yuan in 2024 Q1, an increase of 15.6% over the previous year, achieved net profit of 124 million yuan, an increase of 34.61% over the previous year, and realized net profit without deduction of 122 million yuan, an increase of 50.73% over the previous year.
Incident comments
By focusing on both product channels, overall revenue was superior to industry growth. The company achieved a 7.12% year-on-year increase in revenue in 2023, and the overall growth was faster than the industry level. According to the summary data of Aowei Cloud Network, the retail sales volume of kitchen and bathroom categories in 2023 (tobacco, stoves, electric heating, heating) was 69.87 million units, up 0.1% year on year, and retail sales were 99.8 billion yuan, up 6.5% year on year. The company's domestic retail business (online and offline) all achieved double-digit growth in 2023. By channel, in 2023, online channels achieved revenue of 2,189 billion yuan, up 23.44% year on year, and revenue share increased from 30.48% to 35.13%; offline channels achieved revenue of 2,834 billion yuan, up 10.94% year on year, and the revenue share increased from 43.91% to 45.47%; in 2023, the engineering channel achieved operating revenue of 504 million yuan, down 19.87% year on year, and revenue share from 10.81% Reduced to 8.09%; overseas channels achieved revenue of 632 million yuan, a year-on-year decrease of 20.34%, and the share of revenue decreased from 13.63% to 10.13%. On this basis, the sinking channel achieved revenue of 965 million yuan, an increase of 58.6% over the previous year, or mainly due to the company's earlier sinking market layout and steady increase in core store coverage. The revenue of the new retail channel has grown rapidly in recent years, which is clearly driven by the increase in the sinking market. While optimizing the channel layout system, the company actively promoted product innovation and optimization. During the reporting period, the company launched the Vantage Integrated Cooking Center, focusing on “7 in 1 meter of space, 4 dishes and 1 soup in 15 minutes”. At the same time, it also launched the Vantage Integrated Cooking Center, the all-in-one steaming machine, a new generation of split bath gas heaters, Vantage flame stoves, Vantage quick suction ultra-thin smoke machine E6090HS, integrated stove PY55, and Juneng dishwasher B7, bringing consumers more choices in demand scenarios and continuing to potentially penetrate the consumer market.
The product structure has been upgraded, gross sales margin has increased dramatically, and non-performance deductions have ushered in high growth. The company's gross margin reached 42.2% in 2023, an increase of 2.66 percentage points over the previous year, or mainly related to the company's product structure upgrade, low gross margin engineering, and a decline in the share of overseas channels. In 2023, the company's sales expense ratio increased 0.39 percentage points year on year, mainly due to the simultaneous increase in advertising investment, sales and service fees, and travel expenses. The management expenses rate and R&D expenses rate changed 0.18 and -0.48 percentage points year on year, respectively. At the same time, the company's credit impairment losses in the fourth quarter were 98.70.24 million yuan, a sharp decrease of 192 million yuan year on year. Combined, the company's deducted non-net profit increased by 362.75% year on year. In 2024 Q1, gross margin reached 41.9%, up 2.23 percentage points year on year, sales expenses increased 1.89 percentage points year on year, and management and R&D expenses ratio decreased by 1.01 and 0.48 percentage points year on year, respectively. Combined, the company's net profit deducted increased by 50.73% year on year.
Investment advice: Under the fluctuation of the external environment, the company actively promotes new product innovation and category expansion, and is expected to continue to grow in scale. The company's net profit to mother for 2024-2026 is expected to be 611, 6.95, and 807 million yuan, corresponding to PE of 12.16, 10.69, and 9.21 times, maintaining a “buy” rating.
Risk warning
1. Risk of business fluctuations due to macroeconomic and real estate market conditions; 2. Risk of changes in market share and profit due to increased market competition.