The company released its 2023 annual report and 2024 quarterly report: in 2023, the company achieved revenue of 19.212 billion yuan, up 6.67% year on year; net profit to mother was 2,006 billion yuan, up 10.70% year on year; net profit after deducting net profit of 1,781 billion yuan, up 15.34% year on year. 2023Q4's revenue was 5,076 billion yuan, up 19.49% year on year; net profit to mother was 505 million yuan, up 23.46% year on year; net profit after deduction was 416 million yuan, up 58.29% year on year. 2024Q1's revenue was 4.350 billion yuan, up 10.04% year on year; net profit to mother was 420 million yuan, up 5.02% year on year; net profit after deducting back to mother was 376 million yuan, up 10.29% year on year.
The competitiveness of sofa faucets has not diminished, and the bed and custom furniture business has broken through rapidly. In 2023, the company's sofa business revenue was 9.350 billion yuan, an increase of 4.21% over the previous year; we believe that, on the one hand, thanks to the optimization and layout of domestic trade channels, such as emphasizing survival of the fittest, insisting on channel attack+refurbishing old stores, speeding up the layout of M stores+K stores, actively expanding leading equipment companies, supporting cooperation between dealers and local decoration companies and breaking through shopping center channels. On the other hand, the foreign trade business actively developed a number of new overseas customers, laying a good foundation for later business growth, and for the first time, established two KUKA HOME benchmarks in India Big stores have taken an important step for the brand to go overseas. In addition, bed products and customized products achieved revenue of 4.104 billion yuan and 880 million yuan respectively, with year-on-year increases of 15.36% and 15.57%; mattress R&D and manufacturing costs were well reduced, with strong product and marketing integration, such as mattress Asian Games series IP construction and bedroom space continued to gain momentum; the customized business reduced costs and efficiency, and integrated product planning began to show results, fully presented in a professional store format, and the whole package model was properly explored. The focus was on enhancing product sales competitiveness and optimizing the product price matrix through price-for-volume strategy adjustments, focusing on 39800 Optimize and iterate, continue to promote and expand the volume.
Profit forecast and rating: We expect the company's net profit for 24-26 to be 22.36, 25.20, and 2,768 billion yuan, respectively, up 11.5%, 12.7%, and 9.9% year-on-year. The current closing price corresponds to the 24-25 PE of 14 and 12 times. As a leading soft furniture company, the company was given a 15 to 16 times PE valuation in 2024, corresponding to a reasonable value range of 40.82 to 43.54 yuan, giving it a “superior to the market” rating.
Risk warning: raw material prices fluctuate, market competition intensifies, international trade frictions.