1、美容健康产品增长迅速，海外市场毛利率高增。①分产品，23 年厨卫健康/美容健康产品营收分别为26.15/2.59 亿元，同比-7.46%/+79.19%，毛利率同比+2.73/+3.53ppt 至33.36%/58.25%。②分地区，23 年境外地区/境内地区营收分别为19.4/10.43 亿元，同比-10.26%/+2.42%，毛利率同比+5.26/+3.49ppt 至40.39%/25.05%。公司推进美容健康品类各细分单品创新，拓展美容产品覆盖场景，同时持续深耕国际市场，投建越南基地，提升海外产品交付能力，我们认为有望为公司业绩增长增添新动力。Results for 2023 and 1Q24 exceeded our expectations
The company announced its 2023 and 1Q24 results: revenue of 2,983/681 million yuan in fiscal year 23/1Q24, -6.2%/+12.61% year over year, net profit to mother of 3.52/111 million yuan, +34.94%/+154.72% year over year, net profit after deducting non-attributable net profit of 308.102 million yuan, +24.21%/+156.89% year over year. The performance exceeded our expectations, mainly due to the rapid growth of beauty and health products. The company has continuously optimized products, expanded overseas markets, achieved remarkable results in cost reduction and efficiency, and promoted the optimization and upgrading of its business model in all aspects. We believe that the company is expected to continue to maintain steady business development in the future. On a quarterly basis, the company's 1-4Q23 revenue was -23.72%/-13.99%/+3.14%/+13.71% year-on-year, while net profit to mother was -39.89%/-7.83%/+151.96%/+49.57% year-on-year.
Development trends
1. Beauty and health products are growing rapidly, and gross margins in overseas markets are growing rapidly. ① By product, revenue from kitchen and bathroom health/beauty and health products in '23 was 26.15/259 million yuan, respectively, -7.46%/+79.19%, and gross margin +2.73/+3.53ppt to 33.36%/58.25% year over year. ② By region, revenue for overseas regions/domestic regions in '23 was 19.4/1,043 billion yuan respectively, -10.26%/+2.42% YoY, and gross margin +5.26/+3.49ppt to 40.39%/25.05% yoy. The company promotes innovation in various segments of the beauty and health category, expands the coverage scenario of beauty products, and continues to cultivate the international market, build a base in Vietnam, and enhance overseas product delivery capabilities. We believe it is expected to add new impetus to the company's performance growth.
2. The cost structure was optimized, and the decline in the 1Q24 fee rate led to an increase in net interest rates. The company's gross margin for 2023/1Q24 was 35.02%/35.54%, +4.24/+2ppt. On the cost side, the company's expense rates for the 2023/1Q24 period were 19.32%/18.37%, respectively, +1.48/ -5.29ppt. Among them, the 23-year sales/management+R&D/finance expense rates were 3.98%/15.55%/-0.21%, and -1.04ppt, 1Q24 sales/management+R&D/finance expenses rates were 2.79%/16.4%/-0.82%, year-on-year -2.01ppt/-0.91ppt /-2.37ppt. The company innovates to promote lean management and improve production efficiency. Under the combined influence, 2023/1Q24 net interest rates were 11.81%/16.35%, respectively, +3.6/+9.12ppt.
3. The IDM system drives R&D innovation, and the underlying manufacturing sharing platform optimizes resource allocation. Looking ahead to 2024, 1) In terms of research and development, the company digs deep into user needs, and various divisions focus on technical research and innovation for segmented products. By the end of '23, the company had 1,346 valid domestic and foreign authorized patents, 664 technicians, and continuous implementation of R&D results. The company accelerates research and development of beauty and health categories such as SPA beauty showers to meet the new needs of consumers through intelligent innovation. We expect it to become a new growth point for the company's performance; 2) In the supply chain, the company integrates CRM, PLM and other systems to enhance intelligent manufacturing capabilities, digitally empower the underlying manufacturing sharing platform, and effectively allocate resource investment. We believe that as the company continues to optimize the supply chain and fully tap demand growth points, the company's performance is expected to grow rapidly.
Profit forecasting and valuation
Considering the company's channel and product development, which is expected to improve performance, we raised our 2024 profit forecast by 19% to 479 million yuan, and introduced a new profit forecast of 577 million yuan for 2025. The current stock price corresponds to 2024/2025 16x/14x P/E. Maintaining an outperforming industry rating, the target price was raised by 35% to 23 yuan based on an increase in profit forecasts and a clear growth path, corresponding to 16x/13xP/E in 2024/2025, corresponding to 21% upward space.
risks
Prices of raw materials fluctuated greatly, exchange rates fluctuated greatly, and the promotion of new products fell short of expectations.