Revenue grew slightly in the second quarter and profitability rebounded. 2023H1 achieved revenue of 454 million /-0.95%, net profit of 114 million / + 9.72%, and non-return net profit of 103 million / + 10.11%. Among them, Q2 income is 279 million / + 4.47%, the net profit is 74 million / + 11.65%, and the non-return net profit is 69 million / + 11.50%. The real estate recession and consumption downturn put pressure on the demand of the integrated cooker industry, the overall operation of the company remained sound, and the profit side benefited from the recovery of raw material dividend release and cost optimization.
Sales of integrated stoves are slightly under pressure, and cabinet revenue is growing rapidly. 2023H1's integrated cooker revenue is-5.37% to 403 million, cabinet revenue is + 133.66% to 18 million, and other kitchen supplies revenue is + 91.14% to 28 million. Affected by the high installation attributes and the downturn in real estate, the growth of the integrated cooker industry is under pressure. According to Oviyun.com, the retail volume of the integrated cooker industry was-1.3 to 1.34 million units in the first half of the year compared with the same period last year, but the overall performance and toughness are still better than the kitchen and bathroom rigid demand category. The performance of the company's new products is eye-catching. During the period of 618, the transaction value of TJ3-8B exceeded 100 million, which won the top spot in the sales of simultaneous steaming and roasting products on Tmall and JD.com platforms.
Distribution is continuously adjusted and optimized, and multiple channels are rapidly expanded. 2023H1's distribution channel revenue fell 0.35% to 421 million, e-commerce channel revenue fell 9.95% to 19 million, offline direct revenue fell 6.43% to 13 million, and overseas fell 7.02% to 1.04 million. In terms of offline channels, the dealer model is the basis of growth. The company has added and optimized more than 100 dealers, keeping the number of dealers only 1300. At the same time, it has added or renovated about 150 stores of the fifth generation image stores of Shuaifeng. In terms of online channels, the company vigorously promotes channel construction and operational investment, actively adjusts product layout, and promotes integrated sales with a number of online and offline models of the same model; in terms of home improvement channels, it has achieved more than 1200 local home improvement cooperation outlets, and continue to promote total cooperation. In terms of sinking channels, the company expands the team of investment promotion personnel to improve investment efficiency, and adds a full range of NJ3 cost-effective products to expand sinking channels.
Raw material dividends release superimposed rate control, and the company's profits continue to pick up. Q2 company gross profit margin year-on-year + 1.84pct to 48.04%, mainly due to the decline in raw material prices and product structure optimization. The expense side increases investment in marketing activities and advertising. The Q2 sales expense rate is from + 2.99pct to 13.99%; the management expense rate is from-2.31pct to 3.76%, mainly due to the decrease in share payment; and the R & D expense rate is from-1.30pct to 3.63%, mainly due to the large R & D investment last year and the longer R & D investment cycle this year.
Thanks to higher gross margins and proper cost control, Q2 raised its net profit margin by 1.70pct to 26.41 per cent.
Risk hints: increased competition in the industry; sharp fluctuations in raw material prices; channel construction is not as expected.
Investment advice: adjust earnings forecasts to maintain a "buy" rating.
Taking into account the recovery of offline consumption and the investment of corporate expenses, adjust the profit forecast. It is estimated that the net profit from 2023 to 2025 will be 2.7pm (the previous value is 2.6pm), which is + 10%, 13% and 13% compared with the same period last year. Diluted EPS=1.28/1.45/1.63 yuan, corresponding to PE=14/12/11x, maintains the "Buy" rating.