Fuanna(002327) 光大证券·2024-04-29 02:33Investment Rating - The report upgrades the company's rating to "Buy" due to its low valuation, high dividend yield, and expected steady growth in 2024 [14] Core Views - The company's 2023 revenue slightly declined by 1.62% YoY, but net profit increased by 7.02% YoY, driven by improved gross margin and operational efficiency [13] - In Q1 2024, revenue grew by 5.20% YoY, and net profit increased by 10.24% YoY, supported by higher government subsidies and tax refunds [13] - The company is expected to maintain steady revenue growth in 2024, with profit growth slightly outpacing revenue growth [14] - The company has been expanding its super image stores in key cities, enhancing brand image, and increasing the number of stores, while also improving e-commerce channel performance [4] Financial Performance Summary Revenue and Profit - 2023 revenue was RMB 3.03 billion, a slight decline of 1.62% YoY, while net profit reached RMB 572 million, up 7.02% YoY [13] - Q1 2024 revenue was RMB 652 million, up 5.20% YoY, and net profit was RMB 122 million, up 10.24% YoY [13] - The company's EPS for 2023 was RMB 0.69, with a dividend payout of RMB 0.65 per share [13] Gross Margin and Profitability - 2023 gross margin improved by 2.53 percentage points to 55.63%, driven by cost reductions and higher sales of premium products [13] - By category, gross margins for bedding sets and quilts increased by 1.67 and 2.12 percentage points, respectively [13] - By channel, gross margins for e-commerce, franchised, and direct-operated stores improved by 1.69, 3.56, and 3.61 percentage points, respectively [13] Channel Performance - In 2023, e-commerce, franchised, and direct-operated store revenues accounted for 40%, 27%, and 24% of total revenue, respectively [13] - E-commerce revenue declined by 5.49% YoY, while franchised and direct-operated store revenues were relatively stable [13] - The total number of stores increased by 1.6% YoY to 1,494, with 172 new stores opened and 148 closed [13] Inventory and Cash Flow - Inventory decreased by 7.70% YoY to RMB 701 million at the end of 2023, with inventory turnover days remaining stable at 196 days [13] - Operating cash flow in 2023 increased by 7.89% YoY to RMB 766 million, but declined by 35.75% YoY in Q1 2024 [13] Future Outlook - The company is expected to achieve revenue of RMB 3.31 billion in 2024, growing by 9.16% YoY, with net profit reaching RMB 639 million, up 11.73% YoY [15] - EPS for 2024 is projected at RMB 0.76, with a P/E ratio of 14x [14] - The company plans to continue expanding its store network, enhancing brand image, and improving operational efficiency to drive high-quality growth [4] Valuation and Dividend - The company's average dividend yield from 2021 to 2023 was 5.74%, based on the closing price as of April 26 [14] - The 2024 dividend is expected to be RMB 0.72 per share, with a dividend yield of 6.7% [16]