Incident Overview
The company released its 2023 annual report and 2024 quarterly report.
Overseas markets continued to expand, and Q1 revenue achieved steady growth
In 2023, the company achieved revenue of 2,653 billion yuan, a sharp drop in shipping costs, and a corresponding sharp drop in sales prices, leading to a slight decrease in sales revenue. Among them, Q4 achieved revenue of 596 million yuan, +9.49% year over year. By product: 1) Commercial catering refrigeration equipment: achieved revenue of 1,963 billion yuan, -1.11%; 2) Western kitchen equipment: achieved revenue of 451 million yuan, +4.64% year over year. By region: 1) Domestic sales: achieved revenue of 229 million yuan, +91.07% year-on-year, mainly due to the gradual recovery of the domestic restaurant industry and the development of the domestic chain market; 2) Export sales: achieved revenue of 2,392 billion yuan, -4.80% year-on-year. By sales model: 1) OBM: achieved revenue of 2,004 billion yuan, -0.80% YoY; 2) ODM: achieved revenue of 602 million yuan, +0.39% YoY.
2024Q1 achieved revenue of 631 million yuan, +5.60% year over year. The revenue side grew steadily, which was basically in line with market expectations. By region, overseas is still the company's main source of revenue. Looking ahead to the full year of 2024, revenue growth is expected to accelerate as overall demand in Europe and the US gradually improves, and new products such as superimposed company french fries robots are gradually launched.
The gross margin increased rapidly, and the Q1 profit side exceeded market expectations
In 2023, the company achieved net profit of $511 million, +13.54% year over year, of which Q4 was 104 million yuan, +31.18% year over year. In 2023, the company's net sales margin was 19.26%, +2.4pct year-on-year, and the profit level increased slightly. 1) Margin side: The gross margin of sales in 2023 was 43.50%, +5.72 pct year on year. Among them, the gross margin of export sales and domestic sales was -6.88pct and -2.16pct, respectively. The gross margin of export sales increased sharply. We judge that this is mainly due to a decrease in shipping costs. 2) Expense side: The cost rate for the 2023 period was 20.69%, +2.59pct. Among them, sales, management, R&D and financial expenses rates were +3.18pct, +0.13pct, -0.05pct, and -0.67pct, respectively. The sales expense ratio increased markedly, mainly due to the continued increase in overseas warehouse investment.
In 2024Q1, the company achieved net profit of 164 million yuan, +68.81% year over year; net profit after deduction of 159 million yuan to mother, +68.81% year over year, the profit side greatly exceeded market expectations. 2024Q1's net interest rate to mother and net interest rate after deduction were 26.06% and 25.11%, respectively, +9.76 and 9.40 pct compared with each other, and the profit level increased significantly. 1) Margin side: The gross margin of 2024Q1 sales was 48.15%, +8.05pct compared to the previous year. We judge that this is mainly due to a decrease in shipping costs. 2) Expense side: The cost rate during the 2024Q1 period was 17.65%, -4.38pct year on year. Among them, sales, management, R&D, and financial expense ratios were -1.11pct, +0.27pct, +0.12pct, and -3.64pct, respectively. The sharp decline in the financial expense ratio was mainly due to the impact of exchange earnings.
With continuous channel improvement & new product development, the company is expected to continue to grow steadily. Compared with Japanese companies such as Hoshizaki and Middleby, the company still has a lot of room for improvement. ① Overseas channels are improving: the company's domestic and foreign channel construction is basically completed, and the company has completed the installation of 31 overseas warehouses; ② New product layout: the launch of intelligent new products such as smart french fries robots will effectively complement the company's product matrix and is expected to become a new performance growth point; ③ Production capacity: The commissioning of the Thai production base will further meet the needs of the company's overseas business development, facilitate the company's international market development, optimize the company's production capacity and transportation integration capabilities, and reduce policy risks brought about by a single exporting country.
Investment advice
We expect 2024-2026 revenue to be 30.99, 37.46, and 4.502 billion yuan, respectively, +17%, +21%, and 2024-2026 net profit to mother will be 6.77, 8.37, and 1.10 billion yuan, respectively, +33%, +24%, and +21%. EPS for 2024-2026 will be 1.61, 1.99, and 2.40 yuan, respectively. The 2024/4/26 stock price of 29.78 yuan corresponds to 19, 15, and 12 times PE. Covered for the first time, a “gain” rating was given.
Risk warning
Overseas demand declined, new product expansion fell short of expectations, etc.