Revenue increased in 23 years; gross margin benefited from reduced raw material prices+production efficiency+significant improvements in depreciation and dilution; net interest rate excluding credit impairment was significantly restored. Revenue for 23 years was 3.04 billion yuan, +38.2% year over year; gross profit margin of 26.7%, +2.3 pct year on year; net interest rate due to mother was 1.8%, +3.7 pct year on year; net profit excluding credit impairment of 250 million, +112.4% year on year; net profit excluding credit impairment of 8.2%, +2.9 pct year over year.
At the end of the year, real estate accelerated delivery with high revenue growth in 23Q4, and the growth rate of 24Q1 slowed in the short term during the off-season. 23Q4/24Q1 revenue of 11.3/435 million, YoY +84.6%/+10.3%; gross profit margin 26.1%/23.1%, YoY -1.8/-4.2 pct; return to mother -0.41/016 billion, YoY loss/ +4.6%; net profit margin to mother -3.6%/3.7%, YoY +5.3/-0.2pct.
Product structure was optimized, and armored doors led to a high increase in the average price of other doors. In '23, revenue for steel doors/other doors/smart locks was 19.6/7.2/197 million, +26%/+82.4%/+30.4%, with an average price of -2.6%/+15.6%/-19.1%.
The share of engineering projects has increased significantly, and C-side retail is also growing at a remarkable rate. By channel, big b/small b/c/e-commerce revenue in '23 was 1,49/7.3/59/ 60 million yuan, +61.1%/+10.3%/+29.3%/+18.6% year-on-year.
The risk of impairment was gradually cleared. Credit impairment losses of $195 million in '23 ($160 million in '22). The balance of accounts receivable at the end of '23 billion was $1.54 billion, and bad debt provisions of $375 million have been calculated, accounting for 24.3%, or +6.9pct compared to the previous year. In the current account balance structure: 1) $1.09 billion within 2 years, which is expected to be recovered; 2) $450 million over 2 years, the accrual is relatively sufficient; 3) if subsequent repayment conditions are good, there may be partial impairment recovery.
Other highlights: 1) Cash flow is improving. The revenue ratio for fiscal year 23/24Q1 was 1.01/1.3, and the net operating cash flow was 2.9/-130 million yuan. The cash to cash ratio remained steady in 24Q1. The negative net operating cash flow was mainly due to high operating expenses, and overall cash flow was positive. 2) Dividends are given back to shareholders. It is proposed to pay out 0.3 yuan (tax included) per share, with a dividend rate of 3.8% and a dividend ratio of 241.3% based on the latest closing price. 3) Annual report performance targets reflect high growth confidence. The 24-year revenue target was $3.96 billion, +30% year over year; net profit to mother was 237 million, +331% year over year; net interest rate to mother 6%.
Investment advice: The company is gaining market share at an accelerated pace under manufacturing advantages, while increasing retail sales. The retail market space for secondary renovation, renovation of old houses, etc., is broad, and future growth can be expected. We expect the company to achieve net profit of 239/3.42/424 million yuan in 24-26, corresponding to EPS of 0.54/0.78/0.96 yuan, maintaining the “increase in holdings” rating.
Risk warning: Real estate fell beyond expectations, raw material prices fluctuated sharply, and production capacity released less than expected.