Description of the event
The company disclosed the 2023 annual report & 2024 quarterly report: the company achieved revenue of 11.02 billion yuan in 2023, a year-on-year increase of 9.06%, achieved net profit of 1,733 billion yuan, a year-on-year increase of 10.2%, and realized net profit after deducting non-return to mother of 1,584 billion yuan, an increase of 7.06%. Of these, 2023Q4 achieved revenue of 3.269 billion yuan, an increase of 6.18% over the previous year, and realized net profit of 300 million yuan, a year-on-year decrease of 13.4%; The company achieved revenue of 2,237 billion yuan in 2024Q1, an increase of 2.75% over the previous year, achieved net profit of 398 million yuan, an increase of 2.49% over the previous year, and realized net profit without deduction of 353 million yuan, an increase of 3.34% over the previous year. In addition, the company will distribute a cash dividend of 5 yuan (tax included) for every 10 shares to all shareholders in 2023.
Incident comments
The scale of revenue continued to grow, and the performance of 2024Q1 channels varied. In 2023, the company's revenue increased 9.06% year on year. By product, the company's internal revenue for range hoods/gas stove/dishwasher/all-in-one machines was +10.13%/+8.71%/+27.94%/-7.06%, respectively; by channel, benefiting from the gradual recovery of consumer consumption, the company's retail and e-commerce channels all achieved double-digit growth, and the engineering channel also continued to be sluggish in the real estate sector. The overall kitchen appliance (smoke machine, stove, sterilizer, dishwasher, single-function machine, all-in-one machine) market opened year-on-year A 21.2% decline In the general context, it has bucked the trend and achieved a slight increase due to brand and product advantages. 2024Q1's revenue increased 2.75% year over year, and the performance of various channels was divided. Among them, retail channels are expected to achieve double-digit growth, e-commerce channel consumers tend to be rational and achieve only slight growth, and the engineering channel revenue side experienced a sharp decline.
The gross margin side fluctuated, and growth remained strong and resilient after deducting non-profit. The company's gross margin in 2023 was 50.65%, an improvement of 0.67pct over the previous year. The main reason was that the company deepened the cost management system and established a reasonable all-factor analysis model for procurement, manufacturing, logistics, quality, etc. during the reporting period to achieve scientific control on the cost side. In terms of cost ratio, the company's 2023 sales expenses increased 1.36 pct year over year, or the company vigorously expanded retail channel touchpoints in the low-tier market and increased e-commerce channel marketing efforts during the reporting period, which led to an increase in salary and advertising expenses, and the management expenses rate was basically the same as the previous year. The cost ratio decreased by 0.35 pct year on year. Combined, the company's operating profit in 2023 (gross profit - taxes and additional - sales & management & R&D expenses + credit & asset impairment losses) was 1,543 billion yuan, an increase of 12.63% year on year. On this basis, the company's financial expenses ratio was optimized by 0.16 pct year on year, which ultimately increased the company's net profit margin to mother by 0.16 pct to 15.47% year on year in 2023. The gross margin of the 2024Q1 company was 50.65%, down 4.14pct year on year, or due to the low gross margin of the company's new categories and the continued rise in the price of bulk raw materials; in terms of cost ratio, the company's sales expense rate/management cost rate/R&D cost rate/financial expense ratio were -4.16/+0.11/-0.04/-0.73 pct, respectively. Among them, the sales expense ratio was drastically reduced or mainly because the company adjusted the pace of investment, which ultimately reduced the company's 2024Q1 net profit margin by 0.05 pct to 17.81% year on year, overall After deducting non-net profit, the year-on-year increase was 3.34%.
Investment suggestion: As a leading brand of kitchen appliances, the company is leading the market share in the smoke stove category, and actively explores new product directions around changes in kitchen scenarios and user needs. On this basis, it is expected to further open up incremental markets. The company's net profit for 2024-2026 is expected to be 18.99, 20.86, and 2.09 billion yuan, respectively. The corresponding PE is 13.46, 12.25 and 11.07 times, maintaining a “buy” rating.
Risk warning
1. Risk of fluctuations in real estate sales;
2. The potential risk of an intensification of the competitive landscape.