Core views:
The company disclosed its 2024 interim report. The first half of the year achieved operating income of 8.96 billion yuan (YoY +24.7%); net profit to mother of 0.56 billion yuan (YoY +32.7%). Gross profit margin 23.0% (YOY-0.2pct), net profit margin 6.2% (YOY+0.4pct) to mother. 24Q2 quarterly revenue of 4.76 billion yuan (YoY +24.9%); net profit to mother 0.33 billion yuan (YoY +36.1%). Gross profit margin 25.4% (YoY+1.3pct), net profit margin to mother 7.0% (YoY+0.6pct) (the above year-on-year change data are all calculated based on adjusted data from the TCL Hefei consolidated table).
Export sales are booming, and cold washing revenue is rising. (1) By business: According to the interim report, the 24H1 ice cooling business achieved revenue of 7.61 billion yuan, +21.7% year over year, gross profit margin of 24.9%, and +0.2 pct year on year; washing machines achieved revenue of 1.28 billion yuan, +46.3% year on year, gross profit margin of 10.9%, and -0.8 pct year over year.
(2) By region: 24H1 domestic sales revenue of 2.31 billion yuan, -1.8% year on year, gross profit margin 19.1%, +2.1 pct year on year; export sales revenue of 6.65 billion yuan, +37.7% year on year, gross profit margin 24.3%, year-on-year -1.9 pct. (3) By brand: 24H1 Omar refrigerator subsidiary achieved revenue of 6.56 billion yuan, +26.2% year on year, net profit 1.03 billion yuan, +21.9% year on year; TCL Hefei subsidiary achieved revenue of 2.45 billion yuan, +23.7% year on year, net profit 0.03 billion yuan, +58.1% year on year.
Product structure improvements drive overall profit growth. 24Q2's gross margin was +1.3 pct year over year and +5.1 pct month over month, which is expected mainly due to product structure improvements and regional structural changes. According to data from the General Administration of Customs, the average export prices of 24Q1 and Q2 refrigerators were -1.1% and +2.1%, respectively. According to the company's interim report, 24H1's export revenue accounted for +7.0 pct year over year, and the gross margin of export sales was significantly better than domestic sales. In addition, 24H1's air-cooled refrigerator revenue accounted for 64.0%, +2.5pct year-on-year.
Profit forecast and investment advice: The company is expected to achieve net profit of 0.92, 1.03, and 1.14 billion yuan in 24-26, +17%, +12%, and +11%, respectively. Considering that the company is a leading refrigerator export OEM, it now has TCL's own brand business. Refer to the comparable company that gave it a 24-year PE 13x, corresponding to a reasonable value of 11.06 yuan/share, giving it an “increase in holdings” rating.
Risk warning: Overseas demand weakens, exchange rates fluctuate sharply, raw material costs rise