三季度收入增速放缓主要受内需走弱影响，四季度有望回暖。缝制机械协会展望下半年行业经济可能将经历三季度放缓到四季度再回升的非直线振荡复苏过程。在三季度内需走弱的背景下公司单季度收入增速有所下降，考虑当前国家正规划出台经济刺激政策，伴随四季度行业景气度复苏增长有望加速。Brief performance review
On October 28, 2024, the company released its three-quarter report. 1Q-3Q24 achieved operating income of 4.706 billion yuan, a year-on-year increase of 14.79%; net profit to mother of 0.619 billion yuan, an increase of 50.2% over the previous year. Among them, 4Q23 achieved operating income of 1.471 billion yuan, an increase of 4.4% year on year, and realized net profit to mother of 0.203 billion yuan, an increase of 42.97% year on year.
Management analysis
The slowdown in revenue growth in the third quarter was mainly affected by weakening domestic demand, which is expected to pick up in the fourth quarter. The Sewing Machinery Association anticipates that in the second half of the year, the industry economy may experience a non-linear recovery process that slows down in the third quarter and then picks up in the fourth quarter. Against the backdrop of weakening domestic demand in the third quarter, the company's revenue growth rate declined. Considering that the country is currently planning to introduce economic stimulus policies, growth is expected to accelerate along with the recovery of industry sentiment in the fourth quarter.
Profitability remained high in a single quarter, and there is room for further improvement in the future. In recent years, along with the company's promotion of “Shuangwang” new product development and continuous optimization of the product structure, the proportion of high-value-added products increased profitability. The 3Q24 company's gross profit margin was 33.11%, up 4.3 pcts year on year, down 0.48 pcts month on month; net profit margin was 14.19%, up 4.1 pcts year on year and 0.11 pcts month on month. Considering the launch of the company's new “Guojiao Wang” product in June, it is expected that sales revenue will be low in the third quarter. There is room for further improvement in profitability as “Guo Jiao Wang” gradually increases in the future.
Continue to be optimistic about the company's overseas growth prospects. This year, China's industrial sewing machine exports have gone through a process of gradual transformation from negative growth to positive growth. Considering that both China and the US are currently in a cycle of interest rate cuts, terminal consumption data is expected to improve, and industrial sewing machine exports are also expected to continue to grow at a high rate. The company has actively deployed overseas markets in recent years. 1H24's export revenue was 1.454 billion yuan, up 0.89% year on year. The growth rate changed from negative to positive compared to 23. Combined with industry data, the company's export growth rate in the second half of the year is expected to accelerate further compared to the first half of the year, and continues to be optimistic about the company's overseas growth prospects.
Profit Forecasts, Valuations, and Ratings
The company is expected to achieve net profit of 0.789/0.997/1.219 billion yuan from 24 to 26, corresponding to the current PE19X/15X/12X. Considering the company's leading position in the industry, industry sentiment is expected to recover and maintain a “buy” rating.
Risk warning
The recovery in the sewing machinery boom fell short of expectations, breakthroughs in complete smart customers fell short of expectations, and shareholders' holdings were at risk.
