1） 毛利率/净利率分别为32.22%/13.35%，同比+3.67pct/+3.24pct；2） 销售/管理/研发/财务费用率分别为5.97%/5.55%/6.73%/-0.28%，同比+0.12/+0.32/+0.06/+1.13pct。Incident: The company released its three-quarter report. Revenue for the first three quarters was about 4.706 billion yuan, up 14.79% year on year; net profit to mother was 0.619 billion yuan, up 50.2% year on year; basic earnings per share were 1.31 billion yuan.
Comment:
First three quarters of 2024:
1) Gross margin/net margin was 32.22%/13.35%, +3.67pct/+3.24pct; 2) Sales/management/R&D/finance expense ratios were 5.97%/5.55%/6.73%/-0.28%, respectively, +0.12/+0.32/+0.06/+1.13pct.
24Q3:
1) Achieved revenue of 1.471 billion yuan, +4.4% YoY, -8.38%; net profit to mother 0.203 billion, +42.97% YoY, -11.39% month-on-month; net profit without return to mother 0.186 billion yuan, +45.98% YoY and -14.86% month-on-month.
2) Gross margin/ net margin were 33.11%/14.19%, respectively, +4.3/+4.1pct year over year, and -0.48/+0.11pct month-on-month.
3) Sales/management/R&D/finance expenses were 6.85%/5.96%/7.31%/-0.15%, respectively, +1.16/+0.87/+0.1/+0.89pct; +0.64/+0.55/+0.69pct compared to the previous month.
The company's gross margin continues to be high. Domestic and foreign gross margins showed an upward trend under the influence of factors such as cost declines, changes in product structure, and changes in foreign exchange rates brought about by the scale effect in the first half of the year. Q3 The gross margin remained high in the single quarter, with a slight decrease from month to month, but there was still a significant increase year over year, resulting in a large year-on-year increase in the company's net interest rate, and the growth rate of net profit to mother was higher than the revenue growth rate.
The cumulative sales volume of “Double King” exceeded 0.8 million units, and the explosives strategy was a success. The company seizes the recovery opportunities of the industry. Under the management guidelines of focusing on core categories, creating explosive products, and achieving value marketing, the company drives product structure upgrades through popular product launches and challenges such as Quick Recovery, and drives the growth of various product categories. According to the company's official account, as of November 5, 2024, the cumulative sales volume of the company “Shuangwang” exceeded 0.8 million units. We believe that through “Double King” sales, the company will comprehensively enhance the company's product strength and lead the development direction of high-end categories. Furthermore, according to the company's official account, Jack has been the number one selling industrial sewing machine in the world for 14 consecutive years, according to Frost & Sullivan's authoritative certification.
Dividends+repurchases enhance the company's investment value. On August 13, the company announced that it plans to distribute a cash dividend of RMB 3.00 to all shareholders for every 10 shares, for a total of RMB 0.139 billion (tax included). This is the first mid-term dividend since the company went public. In the first half of 2024, the company repurchased 0.235 billion yuan of shares through centralized bidding transactions. The total amount of cash dividends and repurchases was 0.374 billion yuan, accounting for 89.85% of net profit returned to mother in the first half of 2024. Furthermore, the company announced on October 29 that it plans to use 50 million to 0.1 billion of its own capital to repurchase shares and use them for cancellation. Dividends plus repurchases highlight the company's management's long-term confidence in business development, express the importance they attach to shareholder returns; increase the net asset value per share and maintain a reasonable level of market value.
Maintain the company's “buy” rating. The company's net profit for 24-26 is estimated to be 0.79/1.03/1.12 billion yuan respectively, up 47.1%/29.5%/9.3% year-on-year, corresponding PE is 18/14/13X, maintaining the company's “buy” rating!
Risk warning: downstream demand falls short of expectations; market competition intensifies; product promotion falls short of expectations; valuation and profit forecasts fall short of expectations.
