Description of the event
The company disclosed its annual report: In 2023, the company achieved operating income of 17.507 billion yuan, a year-on-year increase of 22.85%, and realized net profit of 1,615 billion yuan, a year-on-year increase of 41.22%; of these, in the fourth quarter, the company achieved operating income of 5.721 billion yuan, an increase of 21.36% over the previous year, achieved net profit of 402 million yuan, an increase of 28.31% over the previous year, and realized deducted non-net profit of 421 million yuan, an increase of 70.14% over the previous year. At the same time, a cash dividend of 20 yuan (tax included) is distributed for every 10 shares, and the capital reserve fund is increased by 3 shares for every 10 shares.
Incident comments
The results of the focus strategy are outstanding. The intensity of new product launches has increased, revenue growth has accelerated, and the growth performance of various categories and regions has been good.
The company's revenue in 2023 increased by 22.85% year on year, with sub-categories: charging and energy storage revenue increased 25.12% year on year, and the smart innovation category was expected to grow 18.72% year on year. The security category is expected to grow faster. Smart video products are expected to grow 26.47% year on year. The wireless headphone category is expected to grow well due to the intensive launch of new products; sub-regional dimension: North America increased 15.4% year on year (accounting for 47.81%), Europe increased 30.07% year on year (accounting for 21.02%) year on year, Japan 38.49% (accounting for 14.2%), the Middle East increased 19.16% year on year (accounting for 5.19%), mainland China increased 22.42% year on year (accounting for 3.64%), and other regions increased 30.73% year on year (accounting for 8.14%); by channel:
Amazon grew 25.37% year on year (accounting for 57.1%), independent websites increased by 83.37% year on year (accounting for 7.1%), and offline websites increased by 32.81% year on year (accounting for 6.1%), and offline channels increased 8.4% year on year (accounting for 29.7%). The good performance of the independent website channel confirmed that the company's user recognition base was good, and the growth rate of offline channels remained strong and resilient after the introduction period was completed.
The company's annual gross margin increased sharply year on year, quarterly gross margin increase accelerated month-on-month, and operating profit performance in the fourth quarter was strong.
The company's gross margin for the year of 2023 increased 4.8 percentage points year over year to 43.54%. Among them, the gross margin of charging energy storage products increased 0.4 percentage points year on year, the gross margin of intelligent innovation products increased by 9.73 percentage points year on year, and the gross margin of smart video products increased 7.81 percentage points year on year, or mainly due to the company's increased intensity of new product launches, improved shipping costs and exchange rates. At the same time, the gross margin of the company increased 5.6 percentage points year on year. The increase was 0.21 percentage points year-on-year, or mainly due to new product support and the company's excellent supply chain transformation. At the same time, the sales expense ratio increased by 1.58 percentage points year on year in 2023, mainly due to the increase in the company's promotion expenses, sales platform expenses and sales staff wages. Among them, the promotion fee rate increased by about 1 percentage point year over year; the management fee ratio increased 0.07 percentage points year over year, the R&D expenses rate increased 0.49 percentage points year over year to 8.08% year over year, and the financial expenses ratio increased 0.02 percentage points year over year, which combined to make the company's annual operating profit (gross profit amount - tax and additional - sales expenses - management expenses - R&D expenses - financial expenses) 1,642 billion yuan, a sharp increase of 70.65% year-on-year, corresponding to a sharp year-on-year increase of 112.24% in operating profit in the fourth quarter of a single quarter. If the impact of fluctuations in financial expenses is excluded, the year-on-year increase was about 70%. On this basis, the company accrued a long-term bonus plan of 596 million yuan at the end of the year, an increase of 248 million yuan over the previous year. Excluding this factor, the company's operating profit performance is expected to be even stronger.
Investment advice: As a leading cross-border e-commerce brand, the company has built up a strong brand base and perfect channel system, and has the ability to build multiple categories. After the company first took shape, it chose to focus on strategic categories, which helps the company increase its market share more efficiently. We believe that the company is expected to achieve more efficient growth. The company's net profit for 2024-2026 is estimated to be 19.73 billion yuan, 23.28, and 2,742 billion yuan, respectively, corresponding to PE of 19.7, 16.7, and 14.2 times, maintaining a “buy” rating.
Risk warning
1. Overseas consumer demand trends have changed greatly; 2. The competitive situation of overseas companies increasing overseas layout has intensified.