维持盈利预期及“增持”评级。公司业绩符合预期，我们维持公司盈利预期，预计2024-2026 年公司EPS 为1.38/1.59/1.88 元。参考可比公司估值，考虑公司国内品牌认知优势以及海外业务市场扩张空间带来的估值溢价，给予公司2025 年15XPE，提高目标价至23.83元，维持“增持”评级。Introduction to this report:
The performance is in line with expectations. As home trade-ins are promoted nationwide, terminal consumption flexibility is worth looking forward to.
Key points of investment:
Maintain profit expectations and “gain” ratings. The company's performance is in line with expectations, and we maintain the company's profit expectations. The company's EPS is expected to be 1.38/1.59/1.88 yuan in 2024-2026. Referring to comparable company valuations, considering the company's domestic brand recognition advantages and valuation premiums brought about by overseas business market expansion space, the company was given 15 XPE in 2025, raised the target price to 23.83 yuan, and maintained an “gain” rating.
Domestic pressure is temporarily under pressure, and international business performance is impressive. 2024Q3 achieved revenue of 2.02 billion, -10.9% YoY. By business, the domestic retail sector's revenue in the first three quarters of 2024 was 3.6 billion, a year-on-year decrease of 10% +. By brand, the Xilinmen brand decreased by 9%, and the MD brand also decreased by 25%.
The company's offline channel revenue fell 16% + in the first three quarters of 2024, and fell 25% in the third quarter. The decline on the shipping side was high, mainly due to terminal changes and increased pressure to remove inventory, and franchisees were at extremely low inventory levels. The company's channel development focuses on improving the quality of store operations, and the adjustments are expected to continue until 2025. Online channel revenue in the first three quarters of 2024 was 1.2 billion+, up 4% from the same period. Revenue is expected to remain flat in the third quarter, mainly due to the fact that the 2024 618 promotion was not as strong as before. The revenue of the foundry business in the first three quarters of 2024 was 1.76 billion, an increase of 13% +. Among them, the international OEM business grew at a rate of about 30%, and the revenue of the cross-border business in the first three quarters was 0.24 billion yuan, an increase of 11% +.
Cost reduction and efficiency gains & structural improvements contribute to profit optimization. 2024Q3's gross sales margin/net sales margin was 36.5%/7.1%, +4.0pct/-0.5pct year over year, +0.7pct/-0.2pct month-on-month. The 2024Q3 sales/management/ R&D expense rates were 21.7%/4.9%/1.8%/0.6%, respectively, +3.4pct/+0.2pct/-0.2pct/+0.2pct. The increase in the company's gross margin was mainly due to cost reduction and efficiency in the supply chain, a recovery in product margin after domestic retail adjusted promotion strategies, and an increase in high-margin orders for international business.
Trade-in is being promoted comprehensively, and the performance is worth looking forward to. The trade-in policy is gradually being rolled out across the country. The company's offline channels quickly followed up with local governments. Since late September, it has participated in state subsidies. Feedback on terminal sales has been positive, which is expected to drive a rebound in fourth quarter results. The company plans to promote the trade-in policy through different online and offline strategies to help franchisees connect with the platform and the Bureau of Commerce, and there is plenty of room for franchisees to increase coverage.
Risk warning: Prices of raw materials continue to rise, downstream consumer demand falls short of expectations, etc.
