Boss Electric released the 24H1 semi-annual report. 24H1 achieved revenue of 4.729 billion yuan, a year-on-year decrease of 4.16%, and realized net profit to mother of 0.759 billion yuan, a year-on-year decrease of 8.48%. After deducting non-net profit, it reached 0.658 billion yuan, a year-on-year decrease of 11.91%. Looking at the single quarter, 24Q2 achieved revenue of 2.492 billion yuan, a year-on-year decrease of 9.63%, and realized net profit to mother of 0.361 billion yuan, a year-on-year decrease of 18.15%.

By business, 2024H1 achieved revenue of 2.26/1.17/0.18 billion yuan in the first category group of range hoods/gas stove/sterilizers respectively, a year-on-year decrease of 3%/1%/14%. The second category of all-in-one machines/steamers/ovens achieved revenue of 0.28/0.03/0.03 billion yuan respectively, a year-on-year decrease of 11%/19%/23%. Looking at other categories, dishwashers and integrated stoves achieved revenue scales of 3.2 and 0.18 billion yuan respectively, a year-on-year decrease of 4% and 11%. In terms of profitability, the gross margins of the company's smoke machines and gas stoves reached 50.8% and 53.0% respectively, down 4.3 and 3.5 pct from the previous year. The overall gross margin of 24H1 reached 48.3%, a year-on-year decrease of 3.6 pct.

At the industry level, the opening of 24H1 Real Estate Refinement has declined year-on-year, and the completed area has declined. Real estate-related companies are under pressure to grow, and the company adheres to its leading brand market position under pressure. Referring to the company's semi-annual report, the market share of 24H1's offline range hood/gas stove/integrated steamer and dishwasher reached 32%/31%/27%/18%, respectively; in terms of online retail sales, the market share of smoke stove packages/kitchen appliance packages/hood machines/gas stoves was 28%/27%/16%/12%, respectively. The market share of the boss brand in the hardcover channel reached 23%, ranking second in the industry.

Investment advice and profit forecasting. As a leading kitchen appliance brand, the channel layout of the company is perfect. In the short term, the company's business growth rate is under pressure due to real estate prosperity, but the company's position in the main category market is stable, and new categories are expected to continue to improve under brand and channel collaboration, and the company's overall business scale is expected to return to growth in the long run.

We expect the company's 24-26 EPS to be 1.70, 1.84, and 1.99 yuan/share, giving the company a valuation of 13-15 xPE in 2023, and maintaining a “superior to market” rating in the corresponding reasonable value range of 22.10-25.50 yuan.

Risk warning. Terminal demand falls short of expectations, and there is a risk of fluctuations in raw materials.