Core views

The company released its 2024 quarterly report, and achieved operating revenue of 5.378 billion yuan in 24Q1, an increase of 8.38% over the previous year. Looking at the breakdown, export sales are expected to increase by about 40%. Q1 achieved a gross profit margin of 24.42%, a slight decrease of 0.8 pct from the previous year. The estimated gross margin fluctuation is mainly related to changes in the company's domestic and foreign sales business structure. Net profit margin of 8.73% was achieved in 24Q1, which was basically stable year-on-year. In 24Q1, net profit attributable to the parent company was 4.7 billion yuan, an increase of 7.23% over the previous year. Overall, thanks to the boost in the company's export sales business and ongoing cost pressure reduction measures, the company's overall net profit has maintained steady growth.

occurrences

The company released its 2024 quarterly report.

24Q1 achieved operating income of 5.378 billion yuan, an increase of 8.38% over the previous year, and realized net profit attributable to shareholders of the parent company of 470 million yuan, an increase of 7.23% over the previous year, and realized net profit after deducting non-recurring profit and loss of 461 million yuan, an increase of 8.06% over the previous year.

From a profit perspective, the company achieved a gross profit margin of 24.42% in 24Q1, a year-on-year decrease of 0.8 pct, a net profit margin of 8.73%, and a year-on-year decrease of 0.08 pct.

Brief review

1. Revenue level: The export order business became the core driving force for growth. The 24Q1 revenue of the company was 5.378 billion yuan, an increase of 8.38% over the previous year. Looking at the breakdown of domestic and foreign sales, export sales revenue is expected to increase by about 40% in 24Q1. The domestic sales side is affected by factors in the overall market environment, and is expected to remain under pressure.

II. Profitability

From a gross margin perspective, the company's 24Q1 gross profit margin was 24.42%, a slight decrease of 0.8 pct over the previous year. According to the analysis, it is estimated that the share of overseas business in the company's regional business structure has increased mainly.

From the perspective of cost ratio, 24Q1 company's sales/management/R&D/finance cost rates were -0.13%/-0.20%/+0.08%/-0.17%, respectively. Currently, in addition to R&D expenses, all other expenses have been reduced to varying degrees, reflecting the company's overall continuous efforts to reduce fees and increase efficiency, and the company's operating efficiency continues to improve.

From a net profit perspective, thanks to impressive growth on the export side and the company's own continuous fee reduction, 24Q1 achieved net profit of 4.7 billion yuan, an increase of 7.23% over the previous year, a net interest rate of 8.57%, a year-on-year decrease of 0.03 pct, and the company's profitability remained stable.

Investment advice: We expect the company to achieve operating income of 227.95, 243.91, and 26.342 billion yuan respectively in 24-26, with year-on-year increases of 7%, 7%, and 8%, respectively; net profit attributable to the parent company of 22.62, 24.08, and 2,584 billion yuan, respectively, with a year-on-year increase of 3.77%, 6.47%, and 7.29%, respectively. As a leading domestic small home appliance brand, the company's business performance has always been stable, its profitability is stable, and it has maintained a purchase rating.

Risk warning:

1) Risk of macroeconomic fluctuations: In 2023, the domestic service consumer industry experienced restorative growth, while retail demand for kitchen utensils and appliances was relatively sluggish. The domestic home appliance market has moved from a simple incremental era to an era where growth and inventory coexist. The market presents a new form of consumption. Rational consumption is popular, and consumption downgrade coexists with consumption upgrades. If the company fails to optimize the product structure through continuous product differentiation, etc., there is a risk that profitability will decline.

2) Risk of increasingly fierce market competition: With the classification of consumption in the cookware and home appliance market, on the one hand, high-end brands continue to sink channels and adjust their product and price strategies to seize more market share. On the other hand, the sales impact caused by increased competition between platforms is expected to intensify in the future. If the company fails to actively adjust its competitive strategy in response to changes in the market environment, the company may experience a decline in market share due to external competition.