Description of the event
The company expects to achieve revenue/net profit/net profit deducted from non-net profit of 37.20/3.50-4.50/3.09 to 398 million yuan in 2023, +16% /loss/reverse loss; corresponding to 2023Q4, the equivalent of 10.15/0.59-1.59/0.56-145 million yuan, respectively, +2%/reversal loss over the same period last year.
Incident comments
Q4 Revenue performance was stable. Q4 Revenue also increased by 2%, which is related to the weakening of the general real estate environment. Looking at the split business structure, it is estimated that the distribution and agency engineering models have performed well. Under the distribution model, the company continued to promote the investment promotion process. The number of stores increased net in Q3 by 3091 to 33,299, driving the continuous expansion of sales channel revenue. The company's growth structure continues to be optimized, and the sum of the revenue share of distribution and agency engineering channels with good payment conditions and risk control conditions increased to 65% in Q3.
Q4 The profit level returned to the normal range. The company expects the core net interest rate to be 10.7% in 2023Q4, a significant year-on-year improvement. The main reason for accrued credit impairment losses was drastically reduced compared to 2022/Q4. At the management level, the company continuously promotes cost reduction and internal optimization, and promotes continuous improvement in business quality.
The retail side is actively expanding, and increasing promotion of new models helps increase channel profits. The number of the company's dealer stores expanded rapidly, with an average net increase of about 10,000 per year in 2021-2023. Given that there is still a lot of room to cover empty areas, it is expected that the pace of high growth will continue in the future. Structurally, the company continues to promote the development of home improvement channels and actively carry out online and offline joint sales. The company continues to deepen its exploration of existing channels, such as enriching the category structure of supply to dealers through outsourcing and brand cooperation models, and increasing the amount of profit generated by unit dealers.
Stock market, enterprising leader. In the project channel, the overall capital flow of housing enterprises continues to be under pressure, and high-quality housing enterprise customers are scarce. Combined with the completion of the real estate market starting this year, the pressure may gradually be felt, and the comprehensive test on the company may intensify. With advantages such as manufacturing costs, service delivery, and brand image, the company is expected to continue customer cooperation and enjoy leading dividends. According to Aowei Cloud Network data, the company's share of the household hardcover equipment market from January to August 2023 was about 5.7%, ranking first among the brands; at the same time, the company actively explores growth by expanding the number of agents and laying out urban village projects. In the retail market, the pattern may be more fragmented. According to the company's “China Wooden Door Industry Development Research Report (2016-2021)”, the company's market share in the wooden door industry is about 2%, and there is still plenty of room to increase its share. In recent years, the company's retail revenue has continued to expand. 2021, 2022 and the first three quarters of 2023 respectively increased by 181%/26%/20%, respectively, with a good growth trend. Overall, even if the general market faces some phased pressure in the future, the company's own alpha is expected to continue to be realized, showing its leading value.
Continue to pay attention to new growth points driven by marketing changes. In the current context where capital flows from housing enterprises are under pressure, the company focuses on high-quality strategic customers, actively promotes marketing changes, and accelerates the expansion of dealer channels and agency engineering channels. New growth points are gradually emerging. The company's net profit for 2023-2025 is estimated to be 40/4.5/50 billion yuan, corresponding to PE of 12/11/10, maintaining a “buy” rating.
Risk warning
1. Real estate sales and completion fell short of expectations;
2. The company's channel transformation progress is lower than expected.