2024Q2 自主品牌延续增长，内销代工下滑，智能出海符合预期。2024H1 公司营收同增17%，收入表现优于行业整体表现，根据奥维云网，2024H1 智能坐便器线上销售额 25亿元，同降 19.9%，销量 115 万台，同降 14.7%。分产品看：2024H1 智能坐便器及盖板/水箱及配件/同层排水产品收入分别同比+26.61/+7.90%/-16.91%；分地区看：2024H1境内/境外收入分别同比+16.79%/+18.79%。2024Q2 公司收入同增7%，略有降速，估计自主品牌延续增长，智能马桶外销表现符合预期，内销代工有所下滑。Description of the event
In 2024H1, the company achieved revenue/net profit/net profit deducted from net profit of 1.143/0.091/0.08 billion yuan, or +17%/-20%/-24%; of these, 2024Q2 achieved revenue/net profit/net profit deducted from non-net profit of 0.619/0.032/0.027 billion yuan, +7%/-56%/-62% YoY.
Incident comments
2024Q2's own brands continued to grow, domestic OEM sales declined, and smart overseas sales were in line with expectations. 2024H1's revenue also increased 17%, and its revenue performance was superior to the overall performance of the industry. According to Aowei Cloud Network, the online sales of the 2024H1 smart toilet were 2.5 billion yuan, down 19.9%, and the sales volume was 1.15 million units, down 14.7%. By product: revenue from 2024H1 smart toilets and cover/water tanks and accessories/same floor drainage products was +26.61/ +7.90%/-16.91%, respectively; by region: 2024H1 domestic/overseas revenue was +16.79%/+18.79%, respectively. 2024Q2's revenue also increased 7%, slightly decelerating. It is estimated that its own brands will continue to grow, the export performance of smart toilets is in line with expectations, and domestic OEM sales have declined.
Gross margin declined slightly and expense ratios increased, affecting profit-side performance. The gross margin of 2024Q2 also decreased by 1.7 pcts. Mainly due to changes in product structure, it is estimated that the increase in revenue share of light smart toilets and the decline in revenue share of same-level drainage products (higher gross margin) will affect overall gross margin performance. The 2024Q2 sales/management/R&D/finance expense ratio was +7.5/-1.5/+0.6/+3.1 pcts to 14.9%/4.9%/4.0%/-1.1%, mainly due to the sharp increase in sales expenses due to increased competition in the domestic market. The company invested heavily in advertising expenses to promote its own brand; the main reason for the increase in financial expenses was a year-on-year decrease in exchange earnings (2024H1/2023H1, about 5.92/15.11 million yuan, respectively).
Based on the manufacturing advantages cultivated by OEM, the company attaches importance to research and development, and is highly competitive in the industry. In recent years, the company's R&D investment has stabilized at about 4%. As of June 30, 2024, the company and its wholly-owned subsidiaries have a total of 1905 patents and 158 invention patents. The company is also one of the four sanitary ware companies that have won the title of “National Industrial Design Center”, and has industry-leading bathroom product R&D and manufacturing capabilities. The company's OEM customers include leading domestic and foreign sanitary ware companies. Their own-brand products cover the full price range, mainly popular models. This year, they have successively launched light-smart S3, popular product upgrades (F30, UX60, UX70, etc.), and new products such as “pure” and A6pro for the 25th anniversary celebration. It is expected that they will continue to keep up with promotion activity points and continue to launch popular products with cost-effective and innovative features.
Independent brands are growing rapidly, opening up new space for manufacturing overseas. The global smart toilet market space is large, and I am optimistic that the company will grow with “own brand+OEM” two-wheel drive based on the advantages of smart toilet manufacturing. Domestic independent brands are moving from e-commerce to offline, offline store openings are accelerating, new home appliance channels are contributing more, and the brand growth trend is excellent. At the same time, there is plenty of room to go overseas. I am optimistic that the company will rely on the advantages of local industrial chain clusters and high-quality cost control capabilities cultivated over many years to manufacture overseas in potential markets such as the US and the Middle East. 2024 will be a year of acceleration in going overseas, and marginal contributions can be expected.
Profit forecast and valuation: The company is expected to achieve net profit of 0.2/0.25/0.29 billion yuan in 2024-2026, corresponding to PE13/11/9X.
Risk warning
1. Overseas customer orders fall short of expectations;
2. The promotion progress of smart toilets falls short of expectations;
3. The competitive landscape of the industry has deteriorated dramatically.
