According to Aowei retail data, online sales in the projector category increased 1.61% year on year in April '24, but sales decreased 8.47% year on year due to the 9.92% year-on-year drop in average price. Among them, the year-on-year sales growth rate was positive (-2.14% in March '24). The average price decline in the projector category is mainly due to optional attributes of the projector category, which is affected by the downgrade in consumption.
The company caters to consumer demand, and the pricing of core SKUs has been lowered.
① The R10S went on sale in May '24, priced at 4999 yuan, bringing 4K+ three-color laser projection to the 4000+ price range. Previously, the H6 was sold in August '23, reducing the price of 4K projection to 5,699 yuan. Compared with the H6, the R10S also uses a 0.47 inch 4K display effect chip, but the brightness was increased from 1,700 CVIA lumens to 1950 CVIA lumens, but the price decreased. As of June 16, the R10S ranked 3rd in the projector bestseller list.
② The Z7X went on sale in March '23 at a price of 3199 yuan. In '24, the 618 company priced the Z7X at about 2,599 yuan to meet consumers' demand for product price reduction. As of June 16, the Z7X ranked 2nd in the projector bestseller list.
③ Play3 is priced at 1,779 yuan, DLP route 0.23 inch DMD chip+400CVIA lumens, and competes with LCD route products. The price of TI's most basic DMD chip (0.23 inch) was cut by nearly half in May '23, which strongly supports its brand customers to compete with LCD products in the entry-level projector price range.
Investment advice: We believe that the company's price-for-volume strategy was effective in 24Q1. The company's revenue decreased 6.59% year on year in 24Q1 (23Q4 revenue decreased 15.31% year on year), and we speculate that the company's revenue performance year over year was better in 24Q2. We estimate that in 2024-2026, the company's net profit will be 226/3.00/416 million yuan, the corresponding EPS will be 3.23/4.28/5.94 yuan, respectively, and the corresponding PE price will be 29.23/22.08/15.92 times, respectively. Maintain a “Recommended” rating.
Risk warning: macroeconomic downturn, increased market competition, new product performance falling short of expectations, etc.