Incident: The company released its 23 annual report and 24 quarterly report, and achieved revenue of 6.12 billion yuan for the full year, an increase of 13.5%. Net profit to mother was 60 billion yuan, up 10.8%; net profit margin to mother was 9.7%, down 0.2 pct.
Net profit after deducting non-return to mother was 550 million yuan, an increase of 10.0%; deducted non-net interest rate of 9.0%, a decrease of 0.3 pct.
Looking at a single quarter, 23Q1-24Q1 achieved revenue of 8.1/14.9/16.3/21.9/82 billion yuan, an increase of 6.2%/17.1%/9.9%/16.9%/1.8%; net profit of 0.5/1.3/1.7/2.5/0.5 billion yuan, a year-on-year change of +0.5%/+20.0%/+8.2%/+10.5%/-8.4%.
The consolidated gross margin for '23 was 37.1%, down 0.6 pct. The cost rate for the period was 24.4%, a decrease of 0.8 pct.
Among them, the sales/management/R&D/finance cost rates were 14.5%/4.8%/5.2%/-0.1%, respectively, and the year-on-year change was -0.9pct/-0.1pct/0.0pct/+0.2pct. The 24Q1 consolidated gross margin was 37.2%, up 0.3 pct from the same period. The cost rate for the period was 34.2, an increase of 2.9 pct over the same period. Among them, the sales/management/R&D/finance rate was 18.8%/9.0%/6.9%/-0.5%, respectively, with a year-on-year change of +1.2pct/+1.6pct/+0.5pct/-0.5pct.
The volume of the wardrobe and finished products business continues to increase, and the wooden door and wall panel business continues to grow rapidly. By category, overall kitchen cabinets/custom closets/wooden door and wall panels achieved revenue of 28.4/25.1/4.1 billion yuan respectively in 23 years, a year-on-year change of +3.7%/+19.1%/+79.9%, accounting for 46.4%/41.0%/6.7% of revenue, respectively. The gross margin was 40.9%/38.0%/21.0%, respectively, with year-on-year changes of -0.3pct/-0.5pct/+10.6pct.
Major channels performed well. By channel, distribution/direct operation/bulk/overseas business achieved revenue of 31.2/4.7/20.1/150 million yuan respectively, an increase of 7.8%/18.5%/21.2%/31.9%, accounting for 51.1%/7.7%/32.8%/2.5% of revenue, respectively. The gross margin was 35.0%/68.0%/37.7%/18.2%, respectively, with a year-on-year change of +0.2pct/+0.5pct/-2.9pct/+6.1pct.
Profit forecast and rating: Considering the downward impact of the domestic real estate industry, we expect the company's net profit for 24/25 to be 67/750 million yuan (the original forecast for 24 was 750 million yuan), up 12.6% and 12.6% year-on-year, corresponding to 9.3 and 8.2xPE. For reference, comparable companies gave 16 times PE in 24 years, corresponding to a target price of 24.57 yuan (originally 32.37 yuan, 22 times PE in 23, -24%). Maintain an “better than the market” rating.
Risk warning: Industry competition increases risk, real estate sales decline risk, terminal demand falls short of expectations, risk of raw material price fluctuations.