Event: On August 7, 2024, TCL Smart Home released its 2024 semi-annual report. 2024H1's revenue was 8.962 billion yuan (+24.74%), net profit due to mother 0.559 billion yuan (+32.65%), after deducting non-attributable net profit of 0.558 billion yuan (+42.15%). Looking at a single quarter, 2024Q2's revenue was 4.764 billion yuan (+24.86%), net profit due to mother 0.334 billion yuan (+36.12%), after deducting non-return net profit of 0.334 billion yuan (+48.80%). (Note: All used and adjusted, including the caliber of Hefei household appliances).
Revenue side: 2024H1 washing machine business is growing rapidly, and export sales are driving growth. 1) By business:
2024H1 outperformed the industry with cold revenue of 7.612 billion yuan (+21.73%) and sales volume of 8.34 million units (+22.9%). High-end refrigeration products account for 64% of revenue (+2.5pct), and the product structure continues to be optimized; washing machine revenue increased high (1.285 billion yuan, +46.27%), sales volume 1.659 million units (+46.5%), and new products in the “Super Cylinder” series increased rapidly. 2) By region: 2024H1's overseas/domestic revenue was 6.649/2.313 billion yuan, respectively, +37.67/ -1.77% year-on-year, respectively. Overseas contributed actively. Among them, the European market grew steadily, and the Latin American and Middle Eastern African markets increased significantly.
Profit side: 2024Q2's profitability is under pressure in the short term, and it is expected that the results of cost reduction and efficiency will be shown. 1) Gross profit margin: 2024Q2 gross profit margin 25.35% (-3.81pct), or due to overseas pressure; 2) Net profit margin: 2024Q2 net interest rate 13.49% (-3.14pct), expecting cost reduction and efficiency to continue to release dividends; 3) Expense side: 2024Q2 sales/management/R&D/finance expense ratios were 3.53/4.14/3.38/ -1.42%, respectively, -0.03/+0.48/-0.02/+2.5pct, respectively. Increased management expenses ratio or increased sales scale due to increased sales scale Increased costs.
Investment advice: As a cold leader, the company enjoys the dividends of industry growth. Hefei home appliances are expected to make full use of collaboration. Export sales will use the advantages of black electricity to drive TCL's own brand white electricity to go overseas, and domestic sales “trade-in” policies will be implemented or provided; in the future, we look forward to air conditioning business injections and minority share buybacks to further enhance performance. We expect the company's net profit to be 0.889/1.01/1.188 billion yuan in 2024-2026, the corresponding EPS is 0.82/0.93/1.10 yuan, and the PE corresponding to the current stock price is 10.67/9.39/7.99 times. Maintain a “buy” rating.
Risk warning: raw material price fluctuation risk, exchange rate fluctuation risk, minority share repurchase risk, etc., risk of macroeconomic factors fluctuation, etc.