Revenue in '23 increased 0.03% year over year, and net profit to mother changed -1.44%. The company achieved operating income of 5.315 billion yuan in 2023, +0.03% year on year; realized net profit of 572 million yuan, -1.44% year on year; realized net profit after deduction of 515 million yuan, -3.71% year on year; basic earnings per share was 0.68 yuan, compared to 0.69 yuan in the same period last year. The first quarter of 2024 achieved operating income of 1,088 billion yuan, -12.26% year on year; realized net profit of 89 million yuan, or -49.47% year on year; realized net profit after deduction of 87 million yuan, or -46.49% year on year; basic earnings per share was 0.11 yuan, compared to 0.21 yuan for the same period last year.
The gross margin increased by 1.31pct, and expenses increased during the period. The company's gross margin in 2023 was 47.27%, +1.31pct. On the cost side, the cost rate for the 2023 period was 32.31%, +2.45pct year on year. Among them, sales expense rate/ management expense rate/ R&D cost rate/ financial cost ratio were 24.70%/5.95%/2.10%/-0.43%, respectively, +3.24pct/-0.78pct/-0.02pct/+0.01pct, respectively. The company's net profit margin in 2023 was 10.74%, -0.05pct year-on-year. The company's gross margin for the first quarter of 2024 was 43.55%, -0.47% year over year; net margin was 8.23%, -6.01% year over year.
The main business continues to expand, and the number of stores continues to grow. By product, in 2023, the company's standard kits/quilts/pillows/summer products/others/furniture achieved revenue of 1,654 billion yuan/258 million yuan/179 million yuan/318 million yuan/1,048 million yuan, compared to +3.06%/+8.59%/-6.99%/+10.49%/-14.65%/-11.61%, respectively, with gross margins of 50.55%/52.15%/53.92%/49.54%/39.28%, respectively /33.83%, +2.21pct/+1.84pct/+1.54pct/+4.48pct/+0.23pct/-3.40pct. In 2023, the number of direct-run stores of the company was 335, a net increase of 28; the number of franchised stores was 2,395, a net increase of 40.
The company uses a combination of online and offline sales models. The company's offline sales model is mainly franchise, direct management, and group purchase. The company uses a complex marketing model of “franchise chain+direct chain+procurement group purchase”, of which the franchise chain is the main model of offline operation. On the basis of continuing close cooperation with large-scale e-commerce platforms such as Tmall, JD, Vipshop, and Douyin, the company actively lays out emerging sales channels such as webcasts, social marketing, and brand applets, and continuously explores various new marketing methods.
Rollei bedding ranked first in the overall market share of similar products for 19 consecutive years (2005-2023), and Rollei children's bedding ranked first in the overall market share of similar products for 4 consecutive years (2020-2023). The company establishes brand differentiation through its position in the industry, and gradually deepens its “industry first” position into the minds of consumers. At the same time, using “ultra-soft bedding” as the product theme, Rollei launched the Rollei Super Soft Edgeless Duvet series in 2023. The retail sales of the Borderless series broke 100 million, breaking the barriers of homogenization, and creating a special product imprint with ultra-soft attributes. According to the pain points and needs of different online and offline consumers, the company focuses on consumers' exploration links, accurate brand marketing and marketing, and also hires third-party professional organizations to conduct regular consumer research. It has established a closed loop from creativity, to planning, to launch to evaluation, and is committed to continuously improving the brand's popularity, reputation and loyalty.
Investment advice: The company is a leading domestic high-end home textile company. It continues to lay out a “big textile, small home” strategy, adopt a multi-brand business strategy, and form a brand matrix for consumers of different levels and needs to cover the low, medium and high markets. The company's channels are expanding rapidly, the number of offline direct management and franchise stores is steadily expanding, and the online channel still has a lot of room for development. The company's 2024-2026 EPS is predicted to be 0.72 yuan, 0.85 yuan, and 0.97 yuan respectively, and the corresponding PE will be 12.5X, 10.6X, and 9.3X, respectively, maintaining an investment rating of “increased holdings”.
Risk warning: macroeconomic fluctuation risk, home textile industry risk, raw material price change risk, inventory management and price decline risk