Zhejiang Meida(SZ:002677) Guotai Junan Securities·2024-04-22 02:32Investment Rating - The investment rating for the company is "Cautious Accumulate" with a target price of 11.50 RMB, down from the previous target of 12.00 RMB [1][11]. Core Views - The company is experiencing revenue pressure due to a slow recovery in the integrated stove industry and intense competition. The earnings forecast for 2024-2026 has been adjusted, with expected EPS of 0.77, 0.82, and 0.88 RMB, reflecting a downward adjustment of -3% and -7% [11]. - The company is expected to perform better than the industry in terms of revenue and earnings due to its established offline channels and market position [1][11]. Summary by Sections 1. Earnings Forecast and Investment Advice - The company has revised its earnings forecast for 2024-2026, with EPS projected at 0.77, 0.82, and 0.88 RMB, down from previous estimates of 0.79 and 0.88 RMB, indicating a growth rate of +7% for each year [11]. - The target price has been adjusted to 11.50 RMB based on a 15x PE for 2024 [11]. 2. Performance Overview - In 2023, the company achieved a revenue of 16.73 billion RMB, a decrease of 9% year-on-year, while net profit was 4.64 billion RMB, an increase of 3% [16]. - The revenue for Q4 2023 was 4.11 billion RMB, down 6% year-on-year, with a net profit of 1.01 billion RMB, up 26.89% [16]. 3. Revenue Pressure and Performance Expectations - The company is facing revenue pressure, with Q1 2024 revenue at 2.73 billion RMB, down 19% year-on-year, and net profit at 0.77 billion RMB, down 23% [16]. - The average price of integrated stoves has increased, raising the purchasing threshold for consumers, leading to lower overall sales during a slow recovery in consumer purchasing power [16]. 4. Gross Margin and Cost Management - The company's gross margin for 2023 was 47.1%, up 2.99 percentage points year-on-year, while the net margin was 27.76%, up 3.1 percentage points [17]. - In Q1 2024, the gross margin was 46.16%, down 0.78 percentage points year-on-year, with a net margin of 28.18%, down 1.54 percentage points [17]. 5. Cash Flow and Financial Health - The company reported a net cash flow from operating activities of 5.83 billion RMB in 2023, an increase of 2.14 billion RMB year-on-year [20]. - The cash and cash equivalents at the end of 2023 were 12.86 billion RMB, up 1.87 billion RMB year-on-year [23]. 6. Profit Distribution Plan - The company plans to distribute a cash dividend of 7.50 RMB per 10 shares, totaling 4.85 billion RMB, which represents 104% of the net profit for 2023 [31].