国内市场表现承压，海外业务同比高增Incidents:
The company released its report for the third quarter of 2024:
In the first three quarters of 2024, the company achieved revenue of 3.675 billion yuan, -6.46% YoY; net profit to mother was 0.266 billion yuan, or -23.80% YoY. Among them, in a single quarter, the company achieved revenue of 1.463 billion yuan, or -10.14% year on year; net profit to mother was 0.117 billion yuan, or -30.93% year-on-year, putting pressure on performance.
Domestic market performance is under pressure, and overseas business increased year-on-year
By product, the company's overall revenue in the first three quarters of 2024 was 16.62, 1.504, 0.24, and 0.269 billion yuan, respectively, -5.18%, -10.22%, +0.46%, and +2.77%; gross margins were 41.58%, 37.76%, 20.77%, and 16.57%, respectively, and -3.57pct, respectively. The kitchen cabinet and wardrobe business is under pressure, and the wooden door business is performing steadily.
By channel, revenue from the company's direct stores, distributors, bulk business, and overseas business in the first three quarters of 2024 was 2.53, 1.917, 1.105, and 0.131 billion yuan, respectively, -16.25%, -11.81%, +0.95%, and +35.24%; gross margins were 67.26%, 36.68%, 36.48%, and 24.87%, respectively, -2.59pct, -0.53pct, -1.95pct, and +8.15pct, respectively. Domestic market performance was under pressure, and overseas business increased year-on-year. Looking back, with the gradual advancement of domestic trade-in consumer subsidy concessions for home furnishings, etc., and the company's increased market expansion, the domestic market demand side may pick up, and the company's retail channels are expected to improve.
Profitability is declining, and sales expenses are being invested more vigorously
The company's gross profit margin and net margin for the first three quarters of 2024 were 36.83% and 7.24%, respectively, -1.58pct and -1.65pct, respectively. Among them, the company's gross profit margin and net interest rate for the Q3 quarter were 37.04% and 8.03%, respectively, -3.65pct and -2.41pct, respectively. The decline in profitability is mainly due to the company's active concessions to seize market share and changes in business and channel structure.
The company increased its investment in sales expenses. In Q3, sales expenses were 0.267 billion yuan in a single quarter, +11.05% year-on-year, and the sales expenses ratio was +3.48pct year-on-year to 18.22%.
Investment advice:
As a leading enterprise in the custom home furnishing field, multi-category and omni-channel collaboration continues to bring about steady growth in the company's performance. The company's net profit for 2024-2026 is estimated to be 0.439/0.482/0.523 billion yuan, respectively, -26.16%/+9.74%/+8.53% year-on-year, corresponding PE is 14/13/12 times, respectively, maintaining a “buy” rating.
Risk warning:
Downstream demand falls short of expectations; risk of channel expansion falling short of expectations; risk of increased market competition; risk of large fluctuations in raw material prices.
