Introduction to this report:
As an established integrated stove company, the company has plenty of offline channels, and is expected to outperform the industry in terms of revenue and performance.
Key points of investment:
Considering that the integrated stove industry is still in the process of slow recovery and competition in the industry is fierce, the company's revenue side is under pressure. We lowered 2024-2025 and added a profit forecast for 2026. We expect EPS to be 0.77/0.82/0.88 for 2024-2026 (original value of 0.79/0.88 yuan in 2024-2026, reduction of -3%/-7%), with a growth rate of +7%/+7%. Referring to comparable companies, the company was given 15xPE in 2024, and the target price was lowered to 11.5 yuan. Maintain a “prudent increase” rating.
Performance summary: The company's 2023 revenue was 1.673 billion yuan (-9%), and the performance was 464 million yuan (+3%); of these, 2023Q4 revenue was 411 million yuan (-6%), and the performance was 101 million yuan (+27%). The company's 2024Q1 revenue was 273 million yuan (-19%), and the performance was 77 million yuan (-23%). The company's performance was in line with expectations.
There was some pressure on the revenue side, and performance was in line with expectations. The average price of the integrated stove category is high, increasing the purchasing threshold for consumers. As consumer purchasing power slowly recovers, overall sales are relatively sluggish. The cumulative online sales/sales/average price of 2023Q4 integrated stoves was -18%/-13%/-6%, respectively, and the online sales and sales volume of integrated stoves in January-February 2024 were -26.26% and -21.78%, respectively. As a leading enterprise, the company's revenue performance is slightly better than the overall level of the industry. At the performance level, 2024Q1's gross margin was 46.16%, -0.78pct year on year, and the net margin was 28.18%, year-on-year -1.54 pct. The company's cost reduction and efficiency measures contributed positively to gross margin, but the increase in raw material prices in Q1 is expected to have a negative impact on gross margin.
Looking ahead to 2024, as an established integrated stove company, the company has plenty of offline channels, and is expected to outperform the industry in terms of revenue and performance.
Risk warning: Risk of fluctuations in raw material prices, increased market competition, and reduced cost investment efficiency.