Rongtai health(603579) 西南证券·2024-04-17 13:30Investment Rating - The report maintains a "Hold" rating for the company, with expected EPS for 2024-2026 at 1.69, 1.91, and 2.13 yuan respectively [13][14] Core Views - The company's profitability improved significantly in 2023, with gross margin increasing by 4.3pp to 30.8%, driven by foreign sales margin improvement and enhanced production efficiency [1] - Despite revenue decline due to weak domestic demand and overseas market pressure, the company achieved a 23.4% YoY increase in net profit attributable to parent company, reaching 200 million yuan [5] - The company is actively adjusting its overseas team structure and improving profitability, positioning itself for growth as the economy recovers [7] Financial Performance Revenue and Profit - 2023 revenue decreased by 7.5% YoY to 1.86 billion yuan, with domestic sales down 5.16% and overseas sales down 8.59% [5][6] - Net profit attributable to parent company grew 23.4% YoY to 200 million yuan, with Q4 showing strong growth of 32.2% YoY [5] - The company plans to distribute 130 million yuan in cash dividends, with a payout ratio of 66.4% [5] Margins - Gross margin improved to 30.8% in 2023, with domestic and overseas margins at 36.6% and 26.1% respectively [1] - Net margin increased by 2.7pp to 11% in 2023, primarily due to gross margin improvement [1] Product Performance - Massage chairs accounted for the majority of revenue at 1.77 billion yuan, down 5.9% YoY [6] - Massage appliances and experiential massage services saw significant declines of 28.2% and 16.2% respectively [6] Future Outlook - The company is expected to achieve revenue growth of 12.19%, 12.84%, and 11.16% in 2024-2026, with net profit growth of 15.75%, 12.89%, and 11.93% respectively [8] - Domestic revenue is projected to grow at 10% annually, while overseas revenue is expected to grow at 15%, 15%, and 12% in 2024-2026 [20] - Gross margins are forecasted to improve further, with domestic margins stable at 37% and overseas margins increasing from 27% to 29% over the next three years [20]