1、床垫收入同增10%，保持核心品类优势。1H24 实现：1）床垫：收入24.10 亿元，同增10%，其中自主品牌床垫15.81 亿元，同增7%；2）软床及配套：收入10.65 亿元，同减10%；3）沙发：收入4.33 亿元，同增9%；4）木制家具：收入0.50 亿元，同增16%。公司聚焦床垫核心品类，展望2H24，我们认为有望保持核心品类稳健增长趋势。1H24 results are in line with our expectations
The company announced 1H24 results: 1H24 achieved revenue of 3.958 billion yuan, a year-on-year increase of 4.02%, net profit to mother of 0.234 billion yuan, an increase of 5.14% year-on-year, after deducting non-return net profit of 0.223 billion yuan, a year-on-year increase of 5.12%. The performance is in line with our expectations. On a quarterly basis, the company achieved revenue of 1.761/2.196 billion yuan in 1Q/2Q24 respectively, +20.02%/-6.03% year on year, and net profit of 0.074/0.16 billion yuan, respectively, and +20.2%/-0.64% year on year.
Development trends
1. Mattress revenue also increased by 10%, maintaining the core category advantage. 1H24 achieved: 1) mattresses: revenue of 2.41 billion yuan, an increase of 10%, of which 1.581 billion yuan for own-brand mattresses, an increase of 7%; 2) soft beds and accessories: revenue of 1.065 billion yuan, a decrease of 10%; 3) sofas: revenue of 0.433 billion yuan, an increase of 9%; 4) wooden furniture: revenue of 0.05 billion yuan, an increase of 16%. The company focuses on the core mattress category and looks forward to 2H24. We believe it is expected to maintain a steady growth trend in the core category.
2. The gross margin remained stable, the expense ratio was well controlled, and the 2Q24 net interest rate increased year-on-year. The company's 1H24 gross margin was 34.77%, -0.46ppt year over year. On the cost side, the company's expense ratio during the 1H24 period was 27.76%, +0.4ppt year on year, and the decrease in exchange revenue affected the overall cost rate change. Among them, the sales/management/R&D/finance expenses rates were 19.43%/5.61%/2.28%/0.44%, respectively, -0.12pp/ -0.05pp/+0.17pp/+0.4ppt. Contributed to factors such as government subsidies, the 1H24 net interest rate was 5.9%, +0.06ppt year on year. Of these, the 2Q24 net interest rate was 7.27%, up 0.4 ppt year on year. The company's overall cost control was good, and the net interest rate maintained a steady increase.
3. The OEM processing business is growing rapidly, and the retail business of independent brands is under pressure. 1H24 achieved: 1) Independent brand retail business: revenue of 2.4 billion yuan, down 5.9%, of which offline revenue was affected by delayed recovery in consumer confidence and demand, down 11.1% year on year, and online business maintained a growth trend and increased 6.1%; 2) Independent brand engineering business: revenue 0.24 billion yuan, up 53.6%. The company continued to deeply cultivate the hotel chain market to achieve a steady increase in market share; 3) Generational processing business: revenue of 1.16 billion yuan, same increase of 18.8%; 4) Cross-border e-commerce: revenue 0.15 billion yuan, up 30.4% from the same period. The company adheres to retail transformation, efficient operation, and continues to promote a rich channel structure. We are optimistic about the steady progress of subsequent company performance.
4. Launched the smart sleep ecosystem brand AISE Bao, and the trade-in policy is expected to continue to improve the company's performance. The company continues to be deeply involved in the field of sleep technology and continuously increases investment in research and development. 1H24 launched a new smart sleep ecosystem brand, AISE Bao, an original contact-type air spring massage matrix, and AI technology that accurately simulates parents touching their backs during infancy. The company's continuous promotion of new products is expected to drive the steady development of the company's performance.
Recently, the country has introduced policies to promote the exchange of consumer goods for home improvement. We believe that with the encouragement of the “trade-in” policy, the replacement market is expected to drive consumer demand, thereby driving steady growth in the company's performance.
Profit forecasting and valuation
The profit forecast remains unchanged, and the current stock price corresponds to 10/9 times the price-earnings ratio for 2024/2025. Maintain outperforming industry ratings. Taking into account declining market risk appetite and pressure on home improvement demand, the target price was lowered by 24% to 19 yuan, corresponding to 14/12 times the price-earnings ratio in 2024/2025, with 32% upside compared to the current stock price.
risks
Raw material prices have fluctuated greatly, market competition has intensified, and the real estate boom has declined.
