BEAR APPLIANCE(SZ:002959) Guolian Securities·2024-04-29 15:30Investment Rating - The report maintains a "Buy" rating for the company [7]. Core Views - The company experienced a slight revenue decline of 4.58% year-on-year in Q1 2024, attributed to high base effects from the previous year and subdued domestic demand in the small appliance sector [2][3]. - Despite short-term pressures on profitability due to competitive market conditions and declining average selling prices, the company is expected to benefit from innovation and brand strength, leading to potential market share gains in the long term [4][5]. Summary by Sections Financial Performance - In Q1 2024, the company reported revenue of 1.194 billion, a decrease of 4.58% year-on-year, and a net profit of 151 million, down 8.53% year-on-year [1]. - The gross margin decreased by 1.2 percentage points year-on-year, while the sales expense ratio increased by 2.3 percentage points [3]. - The company’s net profit margin fell by 0.5 percentage points year-on-year, with a significant drop in non-recurring profit contributions [3]. Market Dynamics - The small appliance industry is transitioning into a phase of stock competition, with increased challenges for smaller brands due to a shift from e-commerce growth to traffic competition [4]. - The report anticipates a recovery in domestic e-commerce sales, with a narrowing decline in traditional e-commerce channels expected in Q4 2023 [2]. Future Projections - Revenue forecasts for 2024 and 2025 are set at 5.334 billion and 6.022 billion respectively, with year-on-year growth rates of 13.20% and 12.89% [5][6]. - The projected net profit for 2024 and 2025 is 517 million and 585 million respectively, with growth rates of 16.20% and 13.09% [5][6]. Valuation - The target price for the company is set at 66.00, based on a 20x PE ratio for 2024 [5].