YDC(605555) 广发证券·2024-04-26 06:32Investment Rating - The report assigns a "Buy" rating to Dechang Holdings (605555 SH) with a target price of 21 11 RMB per share based on a 24x PE multiple for 2024 [4][5] Core Views - Dechang Holdings achieved significant revenue growth in 2023 with total revenue reaching 2 78 billion RMB (YoY +43 2%) and net profit attributable to shareholders of 320 million RMB (YoY +7 9%) [2] - The company's gross margin improved to 19 1% (YoY +1 3pct) while net margin declined to 11 6% (YoY -3 8pct) [2] - In Q4 2023 revenue grew 60% YoY to 650 million RMB with net profit up 64 9% YoY to 60 million RMB [2] - Q1 2024 saw continued strong performance with revenue of 820 million RMB (YoY +46 1%) and net profit of 90 million RMB (YoY +102 3%) [3] Business Segment Analysis - Vacuum cleaner business recovered with 18% YoY growth in 2023 after inventory adjustments from major customers [3] - Small household appliances segment grew 117% YoY driven by new strategic client SharkNinja [3] - Automotive components business achieved 200 million RMB in revenue with over 2 3 billion RMB in orders secured for 2024-2026 [3] - Gross margins improved across all segments: vacuum cleaners (+0 9pct) small appliances (+5 1pct) and automotive components (+8 7pct) [3] Financial Projections - Revenue is forecast to grow from 2 78 billion RMB in 2023 to 5 24 billion RMB in 2026 representing a CAGR of 23 5% [10] - Net profit is expected to increase from 322 million RMB in 2023 to 598 million RMB in 2026 with a CAGR of 22 8% [10] - EPS is projected to grow from 0 87 RMB in 2023 to 1 60 RMB in 2026 [10] - ROE is forecast to improve from 11 8% in 2023 to 14 2% in 2026 [10] Valuation Metrics - The stock trades at 26 26x 2023 PE and 3 11x 2023 PB [10] - EV EBITDA multiple is expected to decline from 19 46x in 2023 to 7 28x in 2026 [10] - The target price of 21 11 RMB implies 5 1% upside from the current price of 20 08 RMB [5]