Investment Rating - The investment rating for the company is "Recommended" (Maintain) with a target price of 8.79 CNY [4][16]. Core Views - The company's revenue growth remains stable, but increased competition has led to pressure on gross margins. In 2023, the company's net profit attributable to shareholders decreased by 28.4% year-on-year, primarily due to weak industry demand and increased promotional efforts to capture market share, resulting in a gross margin decline of 4.5 percentage points to 28.3% [2][11]. - The company aims for a revenue growth rate of no less than 10% in 2024, based on the 2023 revenue as a benchmark, and a net profit growth rate of no less than 15% [2][16]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 76.5 billion CNY, a year-on-year increase of 1.8%, and a net profit of 4.2 billion CNY, a decrease of 28.4% compared to the previous year. In Q1 2024, the company reported a revenue of 11.3 billion CNY, a year-on-year increase of 2.3%, but a net loss of 0.9 billion CNY [11][12]. - The gross margin for 2023 was 28.3%, down from 32.8% in 2022, and the net margin was 5.6% [11][24]. Sales Channels - The company continues to focus on retail channels, with 86% of revenue coming from distribution (including retail, e-commerce, home decoration, and engineering) and 14% from direct sales. The total revenue from retail, e-commerce, and home decoration channels accounted for 75% of total revenue [12][16]. - The company has expanded its terminal store network to 17,567 outlets by the end of 2023 [12]. Product Development - The company is committed to smart product development, with smart toilet products accounting for over 20% of revenue. In 2023, smart toilet revenue was 15.6 billion CNY, a year-on-year increase of 2 percentage points [15][16]. - R&D investment in 2023 was 3.4 billion CNY, representing 4.5% of revenue [15]. Cash Flow and Financial Health - The operating cash flow for 2023 was 11.7 billion CNY, significantly higher than the previous year, while Q1 2024 showed a negative cash flow of 9.4 billion CNY due to increased material purchases and tax payments [15][18]. - The company's total assets were 10.64 billion CNY in 2023, with a debt-to-asset ratio of 49.1% [10][19]. Future Outlook - The company has adjusted its profit forecasts downward, expecting net profits of 4.3 billion CNY in 2024 and 5.2 billion CNY in 2025, with a new forecast for 2026 at 6.5 billion CNY [16]. - Despite the downward adjustment in profit forecasts, the company maintains a "Recommended" rating due to significant stock price adjustments [16].
毛利率承压拖累业绩，智能化发展向好