Henglin(SH:603661) Minsheng Securities·2024-04-27 04:30Investment Rating - The report maintains a "Recommended" rating for Henglin Co., Ltd. [3] Core Views - Henglin Co., Ltd. reported a total revenue of 8.195 billion yuan in 2023, with a year-on-year growth of 25.78%. However, the net profit attributable to shareholders decreased by 26.60% to 263 million yuan. The first quarter of 2024 showed a recovery with a revenue of 2.354 billion yuan, up 38.98% year-on-year [1][4] - The cross-border e-commerce segment continues to grow rapidly, with significant contributions from platforms like Amazon, TikTok, and TEMU. The company has established five distribution centers in North America to enhance market reach [1][4] - The company has implemented unified bidding for general materials to reduce costs and maintain competitive pricing. The gross margin for office furniture and soft furniture improved, while the gross margin for panel furniture and new material flooring declined [1][4] Summary by Sections Financial Performance - In 2023, the company achieved operating revenue of 8.195 billion yuan, with a net profit of 263 million yuan, reflecting a decrease of 26.60% year-on-year. The first quarter of 2024 showed a recovery with revenues of 2.354 billion yuan, a 38.98% increase year-on-year [1][4] - The company reported a significant increase in inventory levels, particularly in office chairs, which rose by 50% due to the expansion of cross-border e-commerce channels [1][4] Product Segmentation - Revenue from office furniture, soft furniture, panel furniture, and new material flooring in 2023 was 3.47 billion, 1.29 billion, 1.12 billion, and 1.49 billion yuan respectively, with year-on-year changes of 3.6%, 3.0%, -17.7%, and 557.2% [1] - The OEM&ODM and OBM segments generated revenues of 4.815 billion and 3.356 billion yuan respectively, with year-on-year growth of 29.09% and 21.27% [1] Cost Management - The gross margins for office furniture, soft furniture, panel furniture, and new material flooring were 23.43%, 27.25%, 18.82%, and 19.85% respectively, with year-on-year changes of +2.06, +6.47, -4.57, and -7.32 percentage points [1] - The company has focused on data-driven management of material procurement to optimize resource allocation and reduce costs [1][4] Future Outlook - The company is expected to benefit from the recovery in the home furnishing sector in Europe and the U.S. and the continued growth of its cross-border e-commerce business. The projected net profits for 2024, 2025, and 2026 are 557 million, 651 million, and 789 million yuan respectively, with corresponding P/E ratios of 11, 9, and 8 [1][4]