Description of the event
The company's total revenue for the first quarter of 2024 was 3,587 million yuan (+1.72%), net profit attributable to mother was 103 million yuan (+58.9%), after deducting non-net profit of 103 million yuan (+81.72%).
Incident comments
The company's revenue side grew steadily and got off to a good start. In 2024Q1, the company achieved revenue of 3,587 billion yuan, a year-on-year increase of 1.72%, contract liabilities increased by 90 million yuan, and total changes in revenue+contract liabilities amounted to 3,677 billion yuan, an increase of 4.1% year-on-year. Focusing on strategic goals, the company maintained an efficient and high-quality development trend to achieve a “good start” in the first quarter of 2024.
The cost side is expected to have entered an improvement channel, and the company's profitability has steadily increased. The 2024Q1 company's cost per ton still increased year-on-year. It is expected to be related to the cost of including some freight in sales expenses. The company's gross sales margin increased by 1%. We expect that the company's costs have entered an improvement channel (the company began adjusting the statement caliber in 2023Q4 to move part of the freight from sales expenses to operating costs). The company's net interest rate continued to improve. The company's 2024Q1 net profit margin increased by 1.03pct to 2.86%, with gross margin +0.4pct to 37.18%, and the period expense ratio -0.61pct to 24.64%. Detailed changes: sales expense ratio (-0.57pct), management expense ratio (-0.21pct), R&D expense ratio (-0.06pct), financial expense ratio (+0.23pct), operating tax and surcharges.
The net interest rate increase logic was implemented, and the direction of improving the company's profit continued. Looking ahead to 2024, it is expected that U8 products will continue to grow rapidly, driving the company's overall volume and price growth trend. Furthermore, the decline in raw materials, labor, etc. costs is expected to increase the improvement in gross margin in 2024, driving acceleration on the profit side. EPS is expected to be 0.35/0.46/0.57 yuan in 2024/2025/2026, respectively, corresponding PE is 28/22/17 times, maintaining the “buy” rating.
Risk warning
1. The risk of slow recovery in demand;
2. Industry competition further exacerbates risks;
3. Risk of changes in consumer consumption habits, etc.;