Rongtai health(603579) 长江证券·2024-05-20 05:02Investment Rating - The investment rating for the company is "Buy" and is maintained [3][4]. Core Views - The company is a leader in the domestic massage chair market and a significant global manufacturer, with a strong position in the industry. It has established a comprehensive R&D, industrial design, and quality control system for massage chairs. The domestic market has a solid brand recognition foundation, and stable cooperation with major overseas clients is expected to drive new customer growth. As demand gradually stabilizes, the company is actively adjusting its product structure and enhancing cost reduction and efficiency, which is anticipated to lead to rapid recovery growth. The projected net profits for 2024-2026 are 241 million, 287 million, and 339 million yuan, respectively, with corresponding P/E ratios of 14.44, 12.16, and 10.27 [4]. Financial Performance Summary - In Q1 2024, the company achieved operating revenue of 401 million yuan, a year-on-year increase of 3.86%. The net profit attributable to the parent company was 63 million yuan, up 67.31% year-on-year, and the net profit after deducting non-recurring gains and losses was 61 million yuan, a significant increase of 136.04% year-on-year. The gross profit margin reached 35.88%, an increase of 6.60 percentage points year-on-year. The company has improved its cost structure and operational efficiency, contributing to this strong performance [20][21][39]. Market and Revenue Insights - The company's overseas revenue is expected to remain stable, with the domestic market projected to grow. The overall revenue growth is anticipated to recover slightly. The overseas market accounts for about 55% of total revenue, with the Korean market experiencing a slight decline due to order scheduling issues. However, the U.S. market has shown improvement, with an expected growth of around 30%. The domestic market is expected to grow by over 10%, particularly benefiting from online sales platforms [39].