The company released its annual report for the year 23 and the financial report for 24Q1. The company achieved revenue of 2,775 billion yuan in '23, 43.19% year-on-year, and net profit to mother of 322 million yuan, or 7.92% year-on-year. Among them, 2023Q4 achieved revenue of 647 million yuan, or 60.02% year-on-year, and realized net profit of 59 million yuan, or 64.93% year-on-year. 24Q1 achieved revenue of 825 million yuan, or 46.14% year-on-year, and net profit to mother of 85 million yuan, or 102.33% year-on-year. The company's annual dividend is 0.35 yuan/share, with a dividend rate of 40.45%.
The home appliance business is growing rapidly, and the auto parts business continues to expand. In '23, the company's vacuum cleaner business achieved revenue of 1,631 billion yuan, an increase of 17.98% year on year. Other small household appliances business achieved revenue of 822 million yuan, an increase of 117% year on year; the automotive motor business achieved revenue of about 202 million yuan, an increase of 172% year on year.
Benefiting from the expansion of new customers, the company's home appliance business achieved rapid growth. New customer SN contributed 485 million yuan in revenue for the year, accounting for 17.48%. Excluding new customer contributions, we estimate that revenue from the original major customer TTI increased 9%.
Profitability has returned to normal levels from a 22-year high. Affected by the devaluation of the RMB, the company's gross margin was +1.33pp to 19.11%, and the sales/management/ R&D expenses ratio changed to -0.05pp/ -0.73pp/ -0.56pp to 0.40%/4.38%/3.65% respectively. In the end, the net profit margin of the company to mother in '23 was -3.79pp to 11.61% year-on-year, returning to normal levels.
Profit forecasting and investment advice. The company uses vacuum cleaners as the base business, diversified small household appliances as a growth business, and EPS motors as the strategic business. As the automobile motor business gradually increases, we expect the company to achieve net profit of 374 million yuan, 4.7 billion yuan, and 576 million yuan respectively in 2024-2026. Referring to comparable companies, the company is given a PE valuation of 22-25 times in 2024, corresponding to a reasonable value range of 22-25 yuan, maintaining a “superior to the market” rating.
Risk warning. Overseas demand fell short of expectations, and competition in the automotive business was fierce.