The company released its financial results report for the 2024 fiscal year. With FY2024, the company achieved total revenue of HK$18.08 billion, up 5.7% year on year; realized net profit to mother of HK$2.30 billion, up 20.2% year on year. If calculated in RMB terms, the year-on-year increase reached 25.5%.
Domestic and foreign sales have grown, and overseas markets have continued to expand. FY2024, the Chinese market, the North American market, Europe and other overseas markets, Home Group and others achieved operating income of HK$11.99 billion, HK$4.28 billion, HK$1.20 billion, HK$670 million, and HK$270 million respectively, with year-on-year changes of +8.1%, +2.3%, +2.9%, +10.0%, -8.5%, accounting for 65.0%, 23.3%, 6.5%, 3.7% and 1.5%, respectively.
1) Looking at the Chinese market, the company's strategic advantage of focusing on product development and simultaneous brand and pipeline empowerment has gradually become prominent, boosting the company's steady revenue growth in the Chinese market. At the same time, in 2024, the company will focus on developing stores in the sinking market, adding a cost-effective series for Tier 1 and 2 cities, and refining store management to continue to drive revenue growth in offline sales channels. As of March 31, 2024, there were 7,236 brand specialty stores in China (excluding Style and Suning stores), a net increase of 765 over the previous year. At the same time, combined with the first-mover advantage of live e-commerce, the company is expected to achieve continuous strengthening of online brand influence and sales growth through short video promotion, live streaming in its own stores, and in-depth cooperation with leading anchors, and further promote the vigorous development of the company's e-commerce business.
2) Looking at overseas markets: The recovery in overseas market demand and orders is quite obvious. The company actively expanded new channels and customers, reshaped the talent building of the sales team, strengthened the development and upgrading of new export products, and promoted rapid double-digit growth in overseas revenue in the second half of the 2024 fiscal year.
Profit forecast and rating: We expect the company's FY2025-FY2027 net profit to be HK$25.69, 27.90, and HK$2,956 billion respectively, up 11.6%, 8.6%, and 6.0% year-on-year. The current closing price corresponding to FY2025-FY2026 PE is 10.3 and 9.5 times. As a leading enterprise in the furniture field, the company was given a PE valuation of 13 to 15 times FY2025, corresponding to a reasonable value range of HK$8.61 to 9.94, giving it a “superior to the market” rating.
Risk warning: Terminal expansion falls short of expectations, fluctuating raw material prices, fluctuating exchange rates, and international trade frictions.