Shizifu, "Harbor Business Watch"
With its exquisite and stylish appearance and cheap people-friendly price, Little Bear Appliance (002959Hititrichfreecoinsandspins.SZ) small household appliances have many young consumer fans. However, in recent years, more and more household appliance giants have begun to lay out the small household appliance market, and the field of small household appliances where Little Bear Appliances is located is also facing a big impact.
On April 9, Little Bear released its annual report for 2023, and two weeks later the company released its quarterly report for 2024. However, the two financial statements giveHititrichfreecoinsandspinsWith different answers, what is the reason for the good performance in the past year but the decline in both revenue and net profit in the first quarter of this year?
01
The growth rate of performance has slowed down and the cost of sales has reached a new high.
Founded in 2006, Little Bear Appliance is a creative small household appliance + Internet enterprise with its own brand "Little Bear" as the core. The company's main products include kitchen appliances, household appliances and so on.HititrichfreecoinsandspinsHe has small household appliances. Among them, small kitchen appliances include pots and cookers, electric heating, pots, Western-style and electric appliances, while other small household appliances include personal care, mother and infant and kitchen utensils. In August 2019, Xiao Bear Electric Appliances was successfully listed on the Shenzhen Stock Exchange.
According to the annual report, Little Bear Appliance achieved revenue of 47% in 2023.Hititrichfreecoinsandspins.1.2 billion yuan, up 14.43 percent over the same period last year; net profit belonging to shareholders of listed companies was 445 million yuan, up 15.24 percent over the same period last year; net profit belonging to shareholders of listed companies excluding non-recurring profits and losses was 382 million yuan, up 5.59 percent over the same period last year; and basic earnings per share was 2.85 yuan per share, up 14.88 percent over the same period last year.
From the perspective of performance fundamentals, Little Bear Electric Appliances has performed well in the past year, with both revenue and net profit growing.
According to the breakdown of products, small household appliances such as pots and cookers contributed the highest income in 2023, with revenue of 1.204 billion yuan, an increase of 19.84% over the same period last year, followed by kettle appliances, with an income of 849 million yuan, an increase of 12.85% over the same period last year. The income of electric small household appliances reached 713 million yuan, an increase of 18.24% over the same period last year; the income of other small household appliances was 546 million yuan, an increase of 67.54% over the same period last year The cost of living in a small family was 485 million yuan, an increase of 22.80% over the same period last year.
Western-style household appliances, the only one in the main business that showed a decline in income, achieved 568 million yuan in 2023, down 16.99 percent from the same period in 2022.
In 2023, Xiao Bear Electric Appliances is still sold mainly through online channels, supplemented by a small number of offline sales channels. In the current period, the income from online sales was 3.866 billion yuan, accounting for 82.05% of the total revenue, and the offline sales revenue was 846 million yuan, accounting for 17.95%. Online sales methods include online distribution, e-commerce platform warehouse, online direct sales and so on.
Since the first decline in revenue and net profit in 2021, the performance of Little Bear Appliance has been relatively stable in the past two years. However, in recent years, the small home appliance market has entered a stage of stock competition, compared with the first two years of listing, it is also an indisputable fact that the company's performance growth has slowed down.
According to the total data of AVC in 2023, the overall retail sales of kitchen small household appliances was 54.93 billion yuan, down 9.6% from the same period last year, and the retail volume was 265.43 million units, down 1.8% from the same period last year. The proportion of online sales of the domestic kitchen home appliance industry has exceeded 75%, with online retail sales of 42.2 billion yuan, down 10.7% from the same period last year, and offline retail sales of 12.7 billion yuan, down 6.0% from the same period last year.
From 2019 to 2020, Xiao Bear's revenue grew by 31.70% and 36.16% respectively, and its attributable net profit grew by 44.57% and 59.64%, respectively, while in the past two years, the company's revenue grew by 14.18% and 14.43% respectively, according to Dongfang Fortune. The growth rate of attributable net profit was 36.34% and 15.24%, respectively.
In response to its own slowdown, Little Bear Electric Appliances chose to upsell investment.
In 2023, the sales cost of Xiao Xiong Electric Appliance was 884 million yuan, up 21.12% from the same period last year; R & D expenses were 143 million yuan, up 3.93% from the same period last year; and management expenses were 190 million yuan, up 22.93% from the same period last year.
From 2021 to 2023, the sales expenses of Xiao Xiong Electric Appliances are 553 million yuan, 730 million yuan and 884 million yuan respectively, the management expenses are 131 million yuan, 154 million yuan and 190 million yuan respectively, and the R & D expenses are 130 million yuan, 137 million yuan and 143 million yuan respectively. In the past three years, the expenses of Little Bear Electric Appliances have all increased compared with the same period last year, especially the sales expenses, with a total investment of 2.167 billion yuan in three years.
02
Revenue and net profit declined in the first quarter, facing short-term pressure
Two weeks after the disclosure of the annual report, Little Bear's first-quarter report for 2024 arrived as scheduled, but the performance of the first-quarter report seemed to have changed.
In the first quarter of 2024, the revenue of Xiao Xiong Electric Appliance reached 1.194 billion yuan, down 4.58% from the same period last year; the net profit belonging to shareholders of listed companies was 151 million yuan, down 8.53% from the same period last year; the net profit belonging to shareholders of listed companies after deducting non-recurrent profits and losses was 115 million yuan, down 24.26% from the same period last year; basic earnings per share was 0.96 yuan per share, down 9.01% from the same period last year. The weighted average return on equity was 5.36%, down 1.37% from the same period last year.
According to the quarterly report, the sales cost of Xiao Xiong Electric Appliance was 213 million yuan, up 9.45% from the same period last year; management expenses were 46.9455 million yuan, down 0.63% from the same period last year; R & D expenses were 37.3479 million yuan, up 18.70% from the same period last year; monetary funds were 1.504 billion yuan, down 23.12% from the same period last year; accounts receivable was 111 million yuan, up 15.29% from the same period last year; notes payable were 1.277 billion yuan, up 12.33% from the same period last year The accounts payable was 320 million yuan, up 2.26% from the same period last year; the contract debt was 68.7564 million yuan, up 54.55% from the same period last year.
By the end of the reporting period, the net cash flow generated by Xiao Xiong's business activities was 129 million yuan, down 38.57% from the same period last year, mainly due to the decrease in cash received from the sale of goods and services in the current period.
Shortly after the release of the quarterly report, many brokerage companies also gave a rating to Little Bear.
According to the Tianfeng Securities report, the company's gross profit margin in the first quarter of 2024 was 38.51%, down 1.25% from the same period last year, and the net profit rate was 12.63%, down 0.55% from the same period last year. It is expected to be mainly due to the high base profit margin brought about by the staggered order confirmation period brought about by the Spring Festival in the first quarter of 2023. The increase in the rate of sales expenses compared with the same period last year is expected to be mainly due to the company's annual brand activities and new product launches in the first quarter. Homed net profit fell 8.53% compared with the same period last year, while non-net profit decreased by 24.26% compared with the same period last year. The difference between the two is mainly due to the increase in non-recurrent income such as government subsidies in the first quarter. Excluding non-recurrent income such as government subsidies, deducting non-net profit fell even more year-on-year.
On the asset-liability side, monetary funds + transactional financial assets in the first quarter of 2024 were 3.121 billion yuan, 6.74% year-on-year; inventory was 534 million yuan,-5.33% year-on-year; and bills and accounts receivable totaled 111 million yuan, + 15.29% year-on-year. On the turnover side, the turnover days of inventory, accounts receivable and accounts payable in the first quarter were 70.75 days, 10.1 days and 40.25 days, respectively, compared with-1.81, + 4.26 and-2.43 days.
Tianfeng Securities estimates that Little Bear's net profit from 2024 to 2026 will be 4.8 Universe 5.4 / 620 million yuan respectively, corresponding to 17.8x/15.9x/13.9x for PE, maintaining a "buy" rating.
Guolian Securities said in the research report that due to the high base in the same period last year and the lacklustre performance of the domestic sales of superimposed small household appliances, it is reasonable for the company's revenue to decline slightly in the first quarter. In the first quarter, the company's attributable net interest rate decreased by 0.5% compared with the same period last year, and the non-net interest rate decreased by 2.5% compared with the same period last year. Non-recurrent income is mainly due to the enjoyment of value-added tax plus deduction policy and 19.95 million yuan. The short-term pressure on profitability is mainly due to flat demand and fierce competition, the average price of the company has a certain pressure and the efficiency of sales cost input is low.
Guolian Securities mentioned that in recent years, the small home appliance industry has successively experienced the golden growth stage of traditional e-commerce dividend, content e-commerce dividend and epidemic accelerated release of home demand, which has given birth to a large number of small and medium-sized enterprises; on the one hand, considering that the current industry demand is relatively flat and entering the stage of stock competition, on the other hand, the e-commerce platform has shifted from the dividend period to the flow competition period, making it more difficult for small and medium-sized brands to survive. Therefore, in the medium to long term, the pattern of the small home appliance industry may gradually improve, and the share of enterprises that actively innovate to tap opportunities in subcategories is expected to increase; in the short term, the profit base will turn low in the second quarter of last year, and the inflection point of operation can be expected.
Guolian Securities expects its operating income from 2024 to 2025 to be 53.34 yuan and 6.022 billion yuan respectively, with year-on-year growth rates of 13.20% and 12.89% respectively, and net profit of 5.17 yuan and 585 million yuan respectively, with year-on-year growth rates of 16.20% and 13.09% respectively. CAGR is 14.31% in 2023-2026. In view of the company's innovative strength, gradually increasing brand influence and overseas market growth potential, give the company 2024 20 times PE, target price 66.00 yuan, give the company a "buy" rating.
According to the Open Source Securities Research report, the deduction difference in the first quarter of 2024 mainly comes from government subsidies and fair value change income (government subsidy and fair value change income increased in the reporting period compared with the same period last year). In the short term, the company may still face a certain base pressure, but looking forward to the follow-up, as the company gradually launches a series of high-end sets of light-by-light series (rice cookers + wall-breaking machines + health pots + multi-function pots) / drinking water / life / care and other new products, the new product cycle + pre-launch cost is expected to bring improvement in revenue and profitability.
Zhongtai Securities said that the short-term domestic sales boom affected the company's performance, but the current second quarter operating figures under the low base may see an inflection point, and the company's overseas curve continues to grow, forming an effective hedge against domestic sales performance. Considering the positive contribution of government subsidies to profits this year, the profit forecast is slightly adjusted. It is estimated that the net profit for 24-26 years is 5.29,5.94 and 643 million yuan (the value before 24 and 25 years is 5.32 and 606 million yuan), corresponding to PE17, 15 and 14X. Maintain the buy rating.
At the same time, Sino-Thai Securities also said that looking forward to the second quarter, the revenue end is waiting for the online platform to boost the economy. Taobao began 10 billion subsidies in April to warm up the second quarter, and the increase in subsidies is expected to give a certain boost to online sales. The growth figure is likely to be higher at a low profit base. The company had a low base in the second quarter of last year (net interest rate in the second quarter of 2023 was 6.6%). It is expected that with the contraction of Douyin this year, the net interest rate should pick up significantly from the same period last year, but it is expected to be lower than in the first quarter. In the medium term, the company continues to expand the high-end price belt, product positioning extends upward, is expected to form a medium-term pull to the overall gross profit performance.
03
Export sales are growing well, and it is difficult to go out to sea.
With regard to the growth in the annual report and the decline in the performance in the first quarter, senior industrial economic observer Liang Zhenpeng pointed out to Harbor Business Watch that the technical threshold of the small home appliance industry is low, and its product ideas are easy to be imitated by competitors. The positioning of Little Bear Appliances is mainly aimed at young, single and student groups, with a certain degree of differentiation, while slowly, traditional home appliance giants such as Midea, Supor, Jiuyang, Xinbao Appliances, large home appliance enterprises such as Haier, TCL, boss Appliances and so on are all laying out small household appliances and seizing the market, which leads to increasingly fierce competition in the creative small household appliance market.
Liang Zhenpeng said that more and more market competitors began to imitate Little Bear Appliances, filling the gap in the market for small household appliances and causing the market for small household appliances to become saturated. In this case, Little Bear's target customer base will be diverted. This is also why Xiao Bear's performance has been able to grow at a high speed before, but it has declined this year.
High outside attention also includes the development of Little Bear Electric Appliances at sea. According to the 2023 annual report, Little Bear's domestic market revenue reached 4.342 billion yuan, an increase of 10.27% over the same period last year, while overseas market revenue reached 370 million yuan, an increase of 105.66% over the same period last year.
However, from the perspective of revenue structure, domestic sales accounted for 92.16% in 2023, while foreign sales accounted for 7.84%. More than 90% of Xiao Xiong's high income is still mainly in domestic areas.
Liang Zhenpeng said that it is also difficult for Little Bear to go out to sea. If the ODM/OEM contract manufacturing mode is developed in the overseas market, the profit is usually low, but if the independent brand is developed, it makes sense to be an independent brand when the unit value is high. For example, the unit price of many new products, such as Midea, Jiuyang, Superior, and so on, can be at 700 or 800 yuan, or even more than one or two thousand yuan. Only with a high unit value can it cover transportation expenses, product sales channel construction costs, brand promotion costs and other costs.
"small household appliance enterprises like Xiao Xiong Electric Appliances whose overall unit price is about tens to 100 yuan, because each product is relatively cheap, to establish independent brands in overseas markets, it is necessary to establish after-sales service networks, maintenance outlets, sales channels, logistics warehouses and independent marketing, and these costs are relatively high, and whether the lower product prices can cover the above-mentioned costs is not a small problem." (produced by Harbor Finance)