2024Q1's performance is high, and order performance has returned to a high level: Hals 2023H1's performance was mediocre due to orders falling due to large customers leaving inventory, but with the recovery of 2023H2 customer orders, Hals's 2023 full-year performance finally grew. 2024Q1, Hals revenue and net profit increased by 58.6% and 781.6%, respectively. Revenue and profit both surpassed the historical high of the same period in Q1 2022, reflecting that Hals orders have returned to a high level.
New Stanley Quencher boosts 2024 results: According to Hals foreign investor exchanges, the company will begin mass production of Stanley Quencher thermos cups in 2024. We believe this will bring additional profits to the company or increase the scale of profits. As for the traditional Stanley thermos cups originally produced by Hals, we have noticed that many new color schemes have been introduced and are gradually becoming more fashionable, which will benefit orders for traditional Stanley thermos cups from Hals.
YETI is actively introducing new products and new color schemes, which is beneficial to Hals orders: Currently, YETI's inventory sales ratio is still low during the same period. At the same time, many new products and new colors will be launched in 2024Q1, which is expected to benefit Hals orders. YETI's 2024Q1 performance is superior to the annual revenue guidance (+7% to +9%). Market demand is hot, and Hals order growth is expected to grow at the same time as YETI.
Investment advice: Hals is a leading manufacturer of cups and pots. It has a complete industrial chain and has established a two-track development strategy with OEM and OBM. Overseas demand is strong, the pace of inventory replenishment from major customers is obvious. New popular cup orders increase profits, and the continuous efforts of independent brands in products and channels are expected to achieve breakthroughs, all of which are beneficial to the company's profit growth performance in 2024. Maintaining the buy-A investment rating, the company was given 15x PE in 2024, with a target price of 10.35 yuan/share for 6 months.
Risk warning: Industry competition risks, raw material risks, and hypotheses due to macroeconomic fluctuations that fall short of expectations.