前三季度业绩低于预期，盈利能力持续承压，但资金使用效率稳定：1）老板发布前三季度业绩，营收/归母净利润分别同比下滑6.8%/ 12.4%至74.0/ 12.0 亿元，前三季度业绩低于我们预期。2）3Q24 营收/ 归母净利润分别同比下滑11.1%/ 18.5%；线上占比提升推动毛利率同比改善1.0pct 至53.2%，但毛销差收窄1.3pcts 至24.9%，管理/研发/财务费用率分别+0.7%/+0.1%/-0.3%，由此归母净利率同比下滑1.5pcts 至16.6%，盈利能力依旧承压。3）按渠道：3Q24 大零售（创新/下沉/传统零售）/线上/工程渠道营收分别-7.8%（创新/下沉/传统零售分别-18%/-26%/-0.1%）/ -2.7%/ -31.8%，其中工程渠道下滑最为严重，主要因为严格控制信用违约风险有关。4）老板3Q24 存货周转天数小幅改善4 天至106 天，但应收/应付账款周转天数分别同比增加8/3 天至67/178 天，由此净营业周期仍维持于-5 天，资金使用效率依旧较为优异。The results for the first three quarters were lower than expected, and profitability continued to be under pressure, but the efficiency of capital use was stable;
The effect of the trade-in policy is obvious, but it still lacks medium- to long-term logic, and the overall risk-benefit ratio needs to be improved;
The holding rating was lowered, and the target price was lowered by 15% to 25.90 yuan, corresponding to 14 times the 2025 P/E.
The results for the first three quarters fell short of expectations, and profitability continued to be under pressure, but the efficiency of capital use was stable: 1) The boss announced the results for the first three quarters, and revenue/net profit fell 6.8%/12.4% year on year to 74.0/ 1.2 billion yuan, respectively. The results for the first three quarters were lower than our expectations. 2) 3Q24 revenue/net profit declined by 11.1%/18.5% year on year, respectively; the increase in online share drove gross margin to improve 1.0 pct to 53.2% year over year, but gross sales margin narrowed by 1.3 pcts to 24.9%, and management/R&D/finance expense ratios were +0.7%/+0.1%/-0.3% respectively. As a result, the net profit margin fell by 1.5 pcts to 16.6% year on year, and profitability remained under pressure. 3) By channel: 3Q24 retail (innovation/sinking/traditional retail) /online/engineering channel revenue was -7.8% (-18%/-26%/-0.1%, respectively)/-2.7%/-31.8%. Among them, the decline in engineering channels was the most serious, mainly due to strict control of the risk of credit default. 4) Boss's 3Q24 inventory turnover days improved slightly from 4 days to 106 days, but the number of receivables/payables turnover days increased by 8/3 days to 67/178 days, respectively. As a result, the net business cycle remained at -5 days, and the efficiency of the use of funds was still excellent.
The effects of the trade-in policy are obvious, but there is still no medium- to long-term logic, and the overall risk-benefit ratio needs to be improved: 1) After the trade-in policy was implemented nationwide in early September, the boss's retail channel flow grew rapidly, and the growth rate further increased to ~ 50% during the National Day. However, due to monthly delays from shipment to retail sales, the third quarter report did not reflect a boost from national subsidies. In anticipation of a marginal improvement in 4Q24 retail and online channel revenue growth, we expect Bosang Electric's overall 4Q24 revenue to increase 3% year-on-year.
2) Although the trade-in policy is expected to drive 4Q24 and 1Q25 results, the tobacco stove market has already reached maturity, and the consumption currently stimulated is likely to overdraft medium- to long-term demand. However, the expansion of multiple brands of Boss Electric Appliances is unspeakably successful (the introduction of famous brands through sinking channels is progressing slower than expected); after years of cultivation, emerging categories such as all-in-one steamers and dishwashers have remained at ~ 20%. The diversified development of products is not enough to drive the overall development of the company, and Boss's longer-term development remains to be seen.
Therefore, 3) Although the boss's 1H24 dividend rate is as high as ~ 62%, and the 2H24 plan is to pay another dividend, we believe the overall risk-benefit ratio still needs to be improved.
Profit forecast and valuation: downgraded to holding rating, target price reduced by 15% to 25.90 yuan, corresponding 14 times 2025 P/E: We lowered 2024/25 revenue by 14.1%/18.7%, and introduced 2026 forecasts, which are expected to be -4.0%/+4.0%/+3.5% year-on-year to 107.5/111.8/11.57 billion yuan, respectively; reduced 2024/25 net profit by 25.7%/29.1%, and 2026 forecasts, which are expected to be year-on-year -4.1%/+5.1%/+3.9% to 1.66/1.75/1.81 billion yuan. We switched the valuation base year to 2025 and gave the boss 14 times P/E, corresponding to the new target price of 25.90 yuan (vs. current closing price of 24.07 yuan), a 15% reduction from the old target price. Risk warning: Upside risk — the effect of the trade-in policy exceeds expectations; multi-category/multi-brand expansion faster than expected; downside risk — rising raw material prices; weak demand; and increased industry competition.
