Core views:
The company published an annual report for '23 and a quarterly report for '24. In 2023, the company achieved revenue of 3,538 billion yuan, -12.75% year on year; realized net profit of 298 million yuan, -11.14% year over year. On a quarterly basis, 23Q4 and 24Q1 respectively achieved revenue of 1,038/857 million yuan, +19.70%/+22.96% YoY; realized net profit attributable to mother of 0.887/0.43 billion yuan, +72.39%/-17.47% YoY; and realized net profit without return to mother of 0.14/43 million yuan, -72.0%/+21.6% YoY.
It is expected that the phased pressure has passed, and the independent brands have performed well. By product, the company's office chairs/sofases/massage chairs/leisure chairs achieved revenue of 25.58/5.37/2.37/0.29 billion yuan respectively, or -7.86%/-34.36%/-32.23%/-17.97% compared with the same period last year. In 23 years, due to insufficient momentum for overseas economic recovery and the departure of major customers, all of the company's businesses experienced a certain decline. Although the industry is temporarily under pressure, the company is still showing impressive growth on its own brand side. According to the company's 23rd annual report, the online omni-channel GMV ratio for chair support products was +256% during the “Double Eleven” period. It is expected that Yongyi Co., Ltd.'s domestic independent brands of online and offline two-wheel drive combined with continued support from overseas cross-border e-commerce will continue to achieve a steady recovery in performance.
New channels, new customers, and new production capacity were successfully expanded. According to the company's annual report for 23 years, the company has set up more than 20 offices around large and medium-sized cities across the country to cooperate with companies such as China Development Bank, Bank of Communications, Samsung, Gree, and Baidu. Furthermore, the successful delivery of bases in Vietnam and Romania is expected to help the company continue to expand its market share in North America and Europe, and accelerate the development of markets in Asia, Australia, South America, etc.
Profit forecasting and investment advice. The company is deeply involved in the seating industry. According to the 23-year report, Yongyi has established long-term cooperative relationships with well-known manufacturers such as IKEA, Staples, Office Depot, and NITORI, and is expected to further enhance customer acquisition capabilities in the future. Yongyi's 24-26 EPS is estimated to be 1.0/1.2/140 million yuan. Referring to comparable company valuations, the company will be given 15xPE in 2024, corresponding to a reasonable value of 14.94 yuan/share, giving it a “buy” rating.
Risk warning. Risk of geopolitical fluctuations. New product development risks. Risk of a decline in overseas demand.