GREE(000651) 光大证券·2024-05-06 05:02Investment Rating - The report maintains a "Buy" rating for Gree Electric Appliances (000651.SZ) with a target price of 46.62 CNY, compared to the current price of 42.12 CNY [1][7]. Core Insights - Gree Electric Appliances reported record-high performance in 2023, achieving revenue of 205 billion CNY (up 8% year-on-year) and a net profit attributable to shareholders of 29 billion CNY (up 18% year-on-year), aligning with the upper limit of its earnings forecast [5]. - The company announced a dividend of 2.38 CNY per share, exceeding market expectations, with a cash dividend payout ratio of 45.3% for 2023, remaining stable compared to 2022 [5]. - In Q1 2024, Gree's revenue reached 36.6 billion CNY (up 3% year-on-year) and a net profit of 4.7 billion CNY (up 14% year-on-year), with a non-recurring net profit of 4.5 billion CNY (up 22% year-on-year), indicating growth above market expectations [5]. Revenue Analysis - In 2023, air conditioning revenue approached historical peaks at 151.2 billion CNY (74% of total revenue, up 12% year-on-year), with sales volume increasing by 2% [6]. - Other business revenues were 29.4 billion CNY (14% of total revenue, down 18% year-on-year), returning to a reasonable level [6]. - The overall revenue growth in Q1 2024 was slightly lower due to a contraction in other business revenues and a cautious shipment pace in air conditioning to avoid high channel inventory [6]. Profitability Analysis - The net profit margin for 2023 was close to historical highs at 14.2%, with gross margins of 30.6% in 2023 and 29.5% in Q1 2024 [6]. - The gross margin for air conditioning products was 37.0% in 2023, reflecting improvements from price increases and a favorable product mix [6]. - The increase in profitability is attributed to product structure enhancement and channel reform, which improved pricing power [6]. Financial Position - Gree's operating cash flow reached a historical high of 56.4 billion CNY in 2023, with inventory levels continuing to decline, indicating strong sales in the air conditioning sector [6]. - The company's total assets were reported at 368.1 billion CNY in 2023, with a stable level of current liabilities [10]. - The cash flow from operating activities was significantly positive, reflecting robust operational efficiency [10]. Earnings Forecast and Valuation - The report projects net profits of 30.3 billion CNY for 2024, 32.9 billion CNY for 2025, and 36.4 billion CNY for 2026, with corresponding P/E ratios of 8, 7, and 7 times [7][8]. - Gree is recognized as a leader in the air conditioning industry, benefiting from strong brand power, product quality, and channel barriers [7].