TCL Smart Home(SZ:002668) Tai Ping Yang·2024-03-27 16:00Investment Rating - The report maintains a "Buy" rating for the company, Ouma Electric [29]. Core Views - Ouma Electric is expected to benefit from export demand and the "old-for-new" policy, which will catalyze growth in the refrigerator sector. The integration with TCL is anticipated to enhance operational efficiency and profitability [29][12]. - The company has shown significant improvement in profitability, with a projected net profit of 8.76 billion RMB for 2024, increasing to 12.87 billion RMB by 2026, corresponding to EPS of 0.81, 0.93, and 1.19 RMB respectively [22][29]. Company Overview - Ouma Electric, established in 2002, focuses on ODM exports and has shifted back to its core refrigerator business after divesting its internet finance operations. The company has a strong market position, being one of the top four global refrigerator manufacturers and the leading exporter in China [29][46]. - The company’s revenue for 2023 is reported at 15.18 billion RMB, reflecting a year-on-year growth of 30.15%. The overseas business accounts for 67.44% of total revenue, indicating a strong reliance on international markets [42][54]. Industry Analysis - The global refrigerator market is experiencing steady growth, with production reaching 217 million units in 2023, a 5.9% increase year-on-year. The retail market is also expanding, with a 3.04% increase in revenue [58][82]. - Emerging markets are showing significant potential for growth, with the demand for refrigerators in regions like Africa increasing by 25.9% in 2023 [79][82]. Financial Analysis - The company has demonstrated a recovery in profitability, with a net profit of 787 million RMB in 2023, a 69.37% increase from the previous year. The gross and net profit margins have also improved to 23.68% and 10.13% respectively [54][69]. - The financial outlook for Ouma Electric is positive, with expected revenue growth driven by both export demand and domestic sales initiatives [67][29].