Vatti(SZ:002035)2024-03-17 16:00Investment Rating - The report maintains an "Outperform" investment rating for the company [10] Core Insights - The company's profitability has significantly improved in 2023, with a projected net profit attributable to shareholders of 400-490 million yuan, representing a year-on-year increase of 179.54%-242.44% [8][10] - The company has effectively reduced asset impairment provisions, which previously impacted its performance, leading to a low base effect for 2022 [10] - The sales net profit margin for the first three quarters of 2023 was 8.17%, with expectations for the full year net profit margin to recover above 7%, compared to 2.62% in 2022 [10] Market Data - As of March 15, 2024, the closing price of the company's stock was 6.08 yuan, with a price-to-book ratio of 1.5 [6] - The company has a total market capitalization of 4.746 billion yuan [6] Financial Projections - The company is expected to achieve revenues of 6.201 billion yuan in 2023, with a year-on-year growth rate of 6.6% [12] - Projected net profits for 2023-2025 are 460 million yuan, 567 million yuan, and 652 million yuan, respectively, with corresponding year-on-year growth rates of 221.2%, 23.4%, and 15.0% [10][12] - The expected earnings per share for 2023-2025 are 0.54 yuan, 0.67 yuan, and 0.77 yuan [12] Industry Insights - The kitchen appliance market in China showed resilience, with retail volume reaching 87.33 million units in 2023, a year-on-year increase of 0.8%, and retail sales amounting to 167 billion yuan, up 5.3% [9] - The company is expected to benefit from increased market concentration as weaker brands exit the industry, allowing for enhanced market share in the lower-tier markets [9][10]