In 2023, the company achieved an 8% increase in revenue and a 14% increase in net profit. The company's revenue is steady and steady, moderate and positive. The Vietnamese factory has been successfully put into operation. With its advantages such as high product quality, strong personalized design capabilities, and fast delivery, it will accelerate to seize YKK's market share and continue to increase its share within international brands. The company plans to increase revenue by 15% + in 2024. The estimated net profit for 24-26 will be 660 million yuan, 780 million yuan, and 890 million yuan, an increase of 19%, 17%, and 15% over the same period last year. The current market value corresponds to 24PE21X and 25PE18X, maintaining a highly recommended rating.
23Q4 results showed steady growth. 1) 2023: In 2023, the company's revenue was 3.91 billion yuan, +7.7% year on year; net profit to mother was 550 million yuan, +14.2% year over year. It is proposed to pay 4.5 yuan for every 10 shares, increasing the dividend ratio to 90% + in 2023. 2) 23Q4: Revenue of $1.0 billion, +23.8% YoY. Net profit attributable to mother was 257.85 million yuan, turning a year-on-year loss into a profit.
Revenue splitting: The zipper and button business is growing steadily.
1) By product: Zipper revenue in 2023 +6.8% YoY to 2.14 billion yuan, button revenue +9.0% YoY to 1.60 billion yuan, and other accessories +8.8% YoY to 120 million yuan.
2) By region: Domestic revenue was 7.2% + YoY to 2.70 billion yuan, and international revenue +8.7% YoY to 1.21 billion yuan.
Profitability increased, and the gross margin of zippers and buttons continued to increase.
1) 2023: Gross profit margin of 40.9% (+1.9pct), with zipper gross margin +3.0pct to 41.0%, and button gross margin +1.0pct to 42.2% year-on-year. The expense ratio for the period is 24.0% (+1.4pct), mainly the financial expenses ratio increased by 1.0pct; the net interest rate was 14.3% (+0.9pct).
2) 23Q4: Gross profit margin of 39.0% (+6.0pct), period expense ratio of 34.1% (-1.9pct), mainly sales expense ratio decreased by 1.3 pct and management expenses ratio decreased by 0.5 pct; net interest rate of 2.5% (negative for the same period in '22).
Operating cash flow is healthy, and operating capacity remains stable. Operating cash flow of $690 million in 2023 (-13% YoY). As of December '23, the number of inventory turnover days was 91 days (same year on year), and the number of accounts receivable turnover days was 39 days (1 day year on year), which was steady, moderate and positive.
Profit forecasting and investment advice. The company's revenue is steady and steady, moderate and positive. The Vietnamese factory has been successfully put into operation. With its advantages such as high product quality, strong personalized design capabilities, and fast delivery, it will accelerate YKK's market share and continue to increase its share within international brands. The company plans to increase revenue by 15% + in 2024. The estimated revenue for 2024-2026 is 4.53 billion yuan, 5.21 billion yuan, and 5.95 billion yuan, up 16%, 15%, and 14% year-on-year. Net profit attributable to mother was 660 million yuan, 780 million yuan, and 890 million yuan, up 19%, 17%, and 15% year-on-year. The current market value corresponds to 24PE21X and 25PE18X, maintaining a highly recommended rating.
Risk warning: Risk of rising raw material costs, risk of uncertain international trade environment, risk of falling short of expectations in Vietnam's production base construction and risk of receiving orders.