事件Core views
Boss Electric's performance in the first half of the year was under pressure in the short term. Q2 was affected by declining new demand and increased market competition, and revenue and profit declined by double digits. The company's traditional smoke stove sales are stable, and its leading position continues to be consolidated, while increasing the layout of products and channels such as dishwashers and integrated stoves.
Under sluggish demand and declining consumption, the company promoted the development of a multi-brand matrix to meet the diverse needs of users in various circles and channels, and the reputation of sub-brands achieved high revenue and profit growth. The company continues to strengthen its long-term competitive advantage, and will maintain a steady development trend in the future as new channels expand and replacement demand increases.
occurrences
On August 26, 2024, Boss Electric released its 2024 semi-annual report.
In 2024H1, the company achieved operating income of 4.729 billion yuan (YOY -4.16%), net profit to mother 0.759 billion yuan (YOY -8.48%), and a net profit margin of 16.06% (YOY-0.76pct).
Among them, Q2 achieved operating income of 2.492 billion yuan (YOY -9.63%), net profit to mother of 0.361 billion yuan (YOY -18.15%), and a net profit margin of 14.48% (YOY-1.51pct).
Brief review
1. Revenue analysis: The core category position is stable, and the revenue of famous brands is rising 1) The first category group: 2024H1 achieved revenue of 3.607 billion yuan (YOY -2.94%), accounting for 76.27%. Range hood: revenue 2.259 billion yuan (YOY -2.85%), accounting for 47.76%. According to total data from Aowei Cloud Network, the retail sales volume and retail sales volume of 2024H1 domestic range hoods were -0.2% and -3.3% respectively; according to Aowei Cloud Network and company announcement data, the offline and online retail sales market share of boss range hoods reached 31.3% and 16.3% respectively, ranking TOP1, with a market share of 23.4% in the decoration channel, ranking second in the industry.
Gas stoves: Revenue 1.169 billion yuan (YOY -1.17%), accounting for 24.72%. According to the summary data of Aowei Cloud Network, the retail sales volume and retail sales volume of 2024H1 domestic gas stoves were +2.7% and +4.8%, respectively; according to Aowei Cloud Network and company announcement data, the market share of offline and online retail sales of the boss gas stoves was 31.3% and 11.9% respectively, ranking TOP1 and TOP2 respectively.
Sterilizer: Revenue 0.179 billion yuan (YOY -14.00%), accounting for 3.79%. According to the summary data of Aowei Cloud Network, the retail sales volume and retail volume of 2024H1 domestic sterilizers were +1.5% and +1.2%, respectively; according to Aowei Cloud Network and company announcement data, the offline retail sales market share of Boss Sterilizers was 19.8%, ranking TOP2.
2) Second category group: 2024H1 achieved revenue of 0.335 billion yuan (YOY -12.93%), accounting for 7.09%. Among them, the all-in-one machine is 0.282 billion yuan (YOY -11.24%), the steamer 0.028 billion yuan (YOY -18.47%), and the oven is 0.026 billion yuan (YOY -23.48%). According to the summary data of Aowei Cloud Network, the retail sales volume and retail sales volume of 2024H1 domestic embedded micro-steaming were +2.2% and +2.7%, respectively, of which single-function machines were -10.4% and -12.4%, respectively, and multi-function machines were +6.0% and +6.6% respectively; according to Aowei Cloud Network and company announcement data, the offline and online retail sales market share of all-in-one machines reached 26.8% and 11.4% respectively, ranking TOP1 and TOP3 respectively; electric steamers reached 20.9% and 17.5% respectively; electricity ranked TOP3. The market share of offline retail sales of ovens was 17.6%, ranking TOP2.
3) Third category group: 2024H1 achieved revenue of 0.444 billion yuan (YOY -0.79%), accounting for 9.38%. Dishwashers: Revenue of 0.318 billion yuan (YOY -4.01%), accounting for 6.73%. According to the summary data of Aowei Cloud Network, the retail sales volume and retail volume of 2024H1 domestic dishwashers were +4.6% and +3.5%, respectively; according to Aowei Cloud Network and company announcement data, the offline retail sales share of the boss's built-in dishwasher reached 18.4%, ranking TOP2. In addition, water heaters are 0.111 billion yuan (YOY +14.84%) and water purifiers are 0.015 billion yuan (YOY -23.59%). According to the summary data of Aowei Cloud Network, the retail sales and retail sales volume of 2024H1 domestic water heaters were -0.9% and +1.4%, respectively.
4) Integrated stove: 2024H1 achieved revenue of 0.183 billion yuan (YOY -10.68%), accounting for 3.87%. According to the summary data of Aowei Cloud Network, the retail sales volume and retail volume of 2024H1 domestic integrated stoves were -18.2% and -15.2% respectively; according to Aowei Cloud Network and company announcement data, the offline retail sales market share of Boss Integrated Cookers reached 37.6%, ranking TOP1.
5) Other small household appliances: 2024H1 achieved revenue of 0.035 billion yuan (YOY -9.90%), accounting for 0.75%.
6) Other business: 2024H1 achieved revenue of 0.125 billion yuan (YOY -12.02%), accounting for 2.63%.
Under inventory competition+consumption downgrade, multi-brand matrices developed collaboratively, and high fame revenue increased competitiveness. Affected by fluctuations in the real estate industry and increased market competition, the company promotes the development of a multi-brand matrix, adheres to the high-end positioning of boss brands and popularization of famous brands, and meets the diverse needs of users in various circles and channels. 2024H1 While the boss brand stabilizes its leading position in the high-end market, the famous brand targets the mid-tier market to meet the needs of popular and practical consumers for high-quality products with high cost performance, good stability and long service life. In the first half of the year, the subsidiary Mingqi Electric achieved revenue of 0.229 billion yuan (YOY +40.5%) and a net interest rate of 1.6% (YOY+1.5pct). As the layout of famous products and channels accelerates, it is expected that the revenue and profit scale will continue to grow rapidly; in addition, the high-end brand Dize Ze continues to receive engineering orders and is in luxury homes It already has a place in the decoration market.
2. Profit analysis: The level of profit continues to rise, and there is still room for improvement in the long term 1) Gross profit margin: demand and competition deteriorate, and gross margin declines
2024H1 gross margin was 48.88% (YOY-3.05pct), of which Q2 gross margin was 47.29% (YOY-2.38pct), mainly affected by declining new demand and increased market competition. By product, the gross margin of the 2024H1 range hood is 50.79% (YOY-4.31pct), and the gross margin of gas stoves is 53.00% (YOY-3.52pct).
2) Expense rate: control fee, Q2 fee rate decreased slightly
The cost ratio for the 2024H1 period decreased by 2.36 pct year on year, and the sales/management/R&D/finance expense ratio was -2.42/+0.41/+0.27/ -0.62 pct year on year, respectively; of these, the cost ratio for the Q2 period decreased by 0.45 pct year on year, and the sales/management/R&D/finance expense ratio was -1.21/+0.67/+0.59/-0.50 pct year on year, respectively. Main departments: 1) The company scientifically controls brand marketing investment expenses; 2) Increased interest income.
2) Net interest rate: Net interest rate declined in Q2 and is expected to be stable in the future
2024H1 net margin was 16.06% (YOY-0.76pct), of which Q2 net margin was 14.48% (YOY-1.51pct), mainly affected by the decline in gross margin. As gross margin and expense ratios stabilize, and impairment factors are cleared, the company's net interest rate is expected to remain stable, and revenue and profit will grow at the same time.
Investment advice: The company's core category position is stable, and emerging categories continue to contribute more. As new demand declines and market competition intensifies, the company adheres to the multi-brand matrix collaborative development strategy and continuously strengthens its long-term competitive advantage. As the risk of impairment is cleared, the profit level is expected to remain stable. We predict that in 2024-2026, the company will achieve net profit of 1.735/1.838/1.965 billion yuan, corresponding EPS of 1.84/1.95/ 2.08 yuan, and the current stock price corresponding PE is 10.08/9.52/8.90 times, maintaining a “buy” rating.
