Key points of investment:
The performance was outstanding in '23, and excellent growth continued in 24Q1. The company achieved revenue of 15.18 billion yuan for the full year of 2023, an increase of 30.2% over the previous year, and achieved net profit of 787 million yuan to mother, an increase of 69.4% over the previous year.
In the first quarter of '24, revenue was 4.198 billion yuan, up 24.60% year on year, and realized net profit of 225 million yuan, up 27.83% year on year. After deducting non-net profit, it reached 224 million yuan, an increase of 33.25% year on year. The company's revenue and net profit scale expanded significantly in '23, and the 24Q1 revenue and profit side continued to perform well.
The leading refrigerator export position is stable, and the revenue scale has recovered significantly in '23. By business, in 2023, the company's refrigerator and freezer business achieved revenue of 12.987 billion yuan, a year-on-year increase of 32.39%, and gross margin of 25.39%, an increase of 3.95pct; the washing machine business achieved revenue of 2,028 billion yuan, an increase of 21.09% year-on-year, and gross margin increased 1.05 pcts year-on-year to 12.26%. By region, the company's overseas revenue reached 10.238 billion yuan, up 51.95% year on year, gross margin increased 3.61 pct year on year to 25.93%, domestic revenue reached 4.943 billion yuan, up 0.33% year on year, and gross margin increased 2.40 pct to 19.01%.
The company's refrigerator and freezer business reached 14.19 million units in the full year of 2023, up 36% year on year, and washing machine sales increased to 2.56 million units, up 19% year on year. As of 2023, the company has been ranked first in China's refrigerator exports for 15 consecutive years, and China's refrigerator exports ranked first in Europe for 16 consecutive years. The domestic sales volume of the company's TCL brand refrigerators and washing machines all steadily ranked in the top five in the industry.
The name was changed to TCL Smart Home and integrated to create the TCL white power platform. The company changed its name to TCL Smart Home, clarified its smart home appliance corporate image, and firmly promoted the global strategy. Further cultivate the “TCL” independent brand, focus on the middle and high-end ice washing business, and promote a global strategy. The subsidiary Guangdong Omar Refrigerators Co., Ltd. will continue to maintain the “Omar” independent trade name and “global professional refrigerator ODM supplier” position, and continue to support the long-term development of Omar refrigerators.
Investment advice and profit forecasting. Since '21, TCL Home Appliance Group has completed absolute control of listed companies, continuously promoted improvements in corporate governance, and refocused on the main manufacturing business. The company is gradually promoting the integration of its own related white power business, combining Omar's manufacturing capabilities and TCL's brand channels to effectively collaborate and complement each other, enhance its corporate brand image, and accelerate the global strategic layout. We expect the company's 24-26 EPS to be 0.80/0.92/1.05 yuan/share, respectively, an increase of 10%/16%/14% over the previous year. We will give the company a 24-year 13x-16xPE valuation with a corresponding reasonable value range of 10.40-12.80 yuan, giving it a “superior to the market” rating.
Risk warning. Influence of fluctuations in raw materials and exchange rates, asset consolidation falls short of expectations, and terminal demand fluctuates.