The company is deeply involved in the export of smart upholstered furniture. The company was founded in 2002 and listed on A-shares in 2021. It is headquartered in Changzhou City, Jiangsu Province. It is a high-tech enterprise mainly engaged in R&D, design, production and sales of smart electric sofas, smart electric beds and their core accessories. In terms of business structure, smart electric sofa/smart electric bed/smart furniture accessories/other main businesses contributed 74%/15%/10%/1% of revenue respectively in 2023; by region, 99% of the company's revenue was contributed from overseas, and 88% of the company's products were sold to the US in 2023.

Steady growth in performance and healthy cash flow. In 2023, the company achieved revenue of 1.92 billion yuan +31% year over year, gross profit of 33.95%, up 1.40 pct year on year, net profit to mother 0.41 billion yuan +22% year over year, and net operating cash flow of 0.53 billion yuan +101% year over year. 2024Q1 achieved revenue of 0.56 billion yuan +31% year over year, and net profit of 0.12 billion yuan to mother +58% year over year. In terms of sales, smart electric sofas sold 0.683 million pieces in 2023, sales of 0.138 million smart electric beds -3% year-on-year, and sales of 5.31 million smart furniture accessories +2% year-on-year.

The company successfully expanded into new 2024Q1 customers in 2023. In 2023, the company received 34 new customers, 32 of which were retailers, 5 of which were “the top 100 furniture retailers in the US.” In 2023, the company's total sales to US retailer customers accounted for 56% of the company's total revenue, and 63% of the company's revenue in the US market. In the first quarter of 2024, the company received a total of 24 new customers, all of whom were retailers, 2 of which were “the top 100 furniture retailers in the US.”

Appropriate advertising to strengthen publicity within the industry. The company actively participated in the US High Point Exhibition and has been running for many years. This year, it was given the opportunity for indoor marketing. In the future, the company plans to be more proactive in public display, and is currently actively preparing for the Las Vegas exhibition. On the other hand, the company continues to visit and investigate retail stores, understand the sales and on-site display of MOTO products, test and verify the results of the brand building work in a timely manner, and it is expected that MOTO Gallery (store-in-store)'s business progress from the front line can be obtained in a timely manner.

Covered for the first time, a “gain” rating was given. Revenue from 2024 to 2026 is estimated to be 2.3/2.7/3.1 billion yuan, +20%/17%/16% year over year, and net profit to mother is 0.48/0.56/0.65 billion yuan, +17%/16% year over year, corresponding PE is 15/12/11 times.

Risk warning: downstream demand falls short of expectations, risk of trade friction, company performance falls short of expectations