Introduction to this report:
Profitability is expected to continue to recover as the company continues to reduce costs and increase efficiency and the efficiency of all aspects of operation after overseas channel adjustments.
Key points of investment:
Maintaining the profit forecast, the 2024-2026 EPS is expected to be 0.30/0.37/0.45 yuan, compared to +35%/+26%/+20%. Referring to comparable companies in the same industry, and considering the expectations of the home appliance trade-in policy, the overall valuation of the sector is expected to continue to rise. We gave the company 27xPE 2024, raising the target price to 9.9 yuan, and a “gain in weight” rating.
Performance summary: The company's performance is in line with expectations. The company achieved revenue of 159 million yuan in 2024Q1, -6.52% year-on-year, and net profit to mother of 23 million yuan, +28.25% year-on-year.
The overseas business of independent brands has rebounded steadily, and the OEM business has increased rapidly. 2024Q1 Beiding's own brand revenue was 122 million yuan, accounting for 76% (-7pct), or -14% year-on-year. Among them, Beiding China's revenue was 110 million yuan, -17% year over year, and Beiding overseas was 12 million yuan, +28% year over year. The overseas business expansion of the company's “Beiding BUYDEEM” independent brand progressed steadily, and business revenue increased year-on-year.
OEM/ODM revenue of 38 million yuan, accounting for 24% (+7pct),
+33% YoY. OEM/ODM
Business revenue rebounded as inventory levels recovered from major customers. At the performance level, in 2024Q1, the company's gross margin was 49.68%, -2.02pct year on year, and the net margin was 14.18%, +3.84pct year on year; we expect the company's low gross margin to increase in the share of OEM and overseas business is an important reason for the decline in gross margin. The company's 2024Q1 sales, management, R&D and financial expenses ratio was -3.3, -0.01, -0.54, -1.18pct year-on-year. In the process of a slow and weak recovery in consumption, the company's investment on the cost side has been reduced, and the cost ratio has declined.
Looking ahead to 2024, profitability is expected to continue to recover as the company continues to reduce costs and increase efficiency and the efficiency of all aspects of operation after overseas channel adjustments.
Risk warning: The risk of raw material price fluctuations and increased market competition are putting pressure on profit margins.