① Losses are mainly affected by inventory removal and high investment. There were many shipments in the first quarter of this year, but accounts receivable were high, and cash flow was still poor. ② After experiencing inventory removal last year, the household sector has entered a replenishment cycle this year, and it is predicted that customer brand business will increase dramatically. ③ Amazon's willingness to purchase the company has rebounded this year, and the increase is expected to reach about 80%. The company also reached a new partnership with STIHL.
Finance Association, May 17 (Reporter Wu Chao) Engaging in a new energy garden machinery circuit, which is rare in China, Glebe (301260.SZ)'s performance changed and suffered losses in its first year of listing. At the performance briefing held today, the company's management answered investors' concerns, from the causes of losses to development prospects.
Grubbo faced greater pressure on performance in 2023. Net profit loss reached 474 million yuan, turning into a year-on-year loss. In response, Xu Youtao, financial director and director of Grubbo, explained that the company's losses in 2023 were mainly affected by the industry's inventory removal, while the company increased its R&D investment and sales channel expansion expenses. Beginning in 2024, the company actively adopted measures to reduce costs and increase efficiency. At the same time, sales revenue in the first quarter increased relatively well year-on-year.
Financial reports show that in the first quarter of this year, Glebe achieved revenue of 1,636 billion yuan, an increase of 5.45% year on year; net profit attributable to shareholders of listed companies was 130 million yuan, an increase of 48.46% year on year.
However, in the context of increased revenue and profits, Glebe lost cash in the first quarter of this year. Net cash flow from operating activities was -208 million yuan. Some investors asked, why did the trend of changes in cash flow diverge from profits?
In response, Xu Youtao admits that there were more shipments in the first quarter, accounts receivable were higher, and cash flow from operating activities improved compared to the previous year, but it was still not good. The company will continue to increase operating cash flow.
In the prospectus disclosed by Glebe, comparable peers in the garden machinery industry selected include Superstar Technology and Quanfeng Holdings. As a result, some investors are concerned that Superstar Technology (002444.SZ)'s performance level during the same period was significantly better than that of Glebe. What are the reasons behind this?
In response, Gree Chairman Chen Yin believes that the industry where Superstar Technology is located is not exactly the same as the industry the company is in, so it is not reasonable to compare the two companies when comparing performance.
He explained, “First, the main products of Superstar Technology are hand tools, and the company's main products are new energy garden machinery. There is a big difference between the two products, and the development cycle is not the same; secondly, the unit price of Superstar Technology's hand tool products is generally less than 30 US dollars, and the unit price of the product is relatively high. In the macro context of high inflation in Europe and the US, the unit price of Superstar Technology's hand tools is relatively low, and the downstream channel is promoted to a certain extent; third, the unit price of Superstar Technology's manual tools is relatively low, and the downstream channel is affected to a certain extent. Inventory impact Smaller.”
Chen Yin further suggested that in 2023, after experiencing inventory removal from customer channels, the household sector is expected to resume growth in 2024. Take Amazon as an example. The amount of money Amazon sells the company's products to end customers fell by only 7% in 2023, but the company's sales to Amazon fell by more than 50%. With the completion of Amazon's inventory reduction goal, the company's purchasing intentions began to pick up in 2024, and the increase is expected to reach about 80%.
He also said that while developing its own brand business, the company has also attracted some well-known companies in the OPE industry, such as STIHL, TORO, ECHO, etc. to cooperate with the company, and customer brand revenue also forms an important part of the company's business. Inventory removal in 2023 also affected the company's customer brand business. In that year, revenue from this business fell by about 40% compared to 2022. As inventory removal is completed, customer brand sales will also pick up, which will drive the company's revenue level in this business to rise. TORO, ECHO, etc. all issued order requests to the company. Affected by this, the company's performance rebounded in the first quarter of 2024, and customer brand business revenue is also expected to pick up throughout the year.
Furthermore, Chen Yin revealed that the commercial zero-steering lawn mower Optimusz launched by the company was favored by STIHL. The company has already reached a cooperation with it to manufacture such products under the brand. As delivery volume increases in 2024, it will also help the company increase its revenue for that year.
Furthermore, in response to agency research, Glebe recently stated that in the first quarter of this year, customer brand business development was relatively good, mainly because downstream retailers had a big impact on these customers last year. Beginning this year, with downstream retailers' inventory requirements, these customers also began to enter the replenishment cycle. Based on the company's current orders, it is predicted that the customer brand business will increase dramatically this year.
Regarding the overseas layout situation, the company said that shipments from the Vietnam base exceeded 50% of the total shipment volume. The first phase of the company's plant in Vietnam has already been built, the equipment is being installed and commissioned, and it will be officially put into operation within the year. Furthermore, the company believes that shipping rates have fluctuated quite a bit recently. Since the company's shipping to North America and Europe is concentrated more in the fourth quarter and the first quarter, it will have a small impact on the company's operating costs, and the company also avoids risks by signing long-term agreements with shipping companies, etc.
At the performance briefing, Glebe also responded to some questions from the market. In response to questions about the decline in the secondary market, market value management arrangements, and the progress of the holdings increase plan, Chen Yin said that the increase in holdings is ongoing, and in the long run, the stock market value depends on the company's intrinsic value.