After the disclosure of the first-quarter report showing that both operating income and net profit growth were less than 3%, on April 25th, Robam Appliances (002508.SZ) plummeted by 5.46%, closing at 22.5 yuan.
For the full year of last year, the net profit growth of Robam Appliances was still maintained at over 10%. However, in the first quarter of this year, its revenue and net profit growth rates were only 2.75% and 2.49%, respectively. Additionally, the company's operating cash flow in the first quarter also plummeted by 70%.
Temasek, which has held a long position, slightly reduced its holdings in the first quarter of this year after years of increasing its stake, while the Bank of Communications Schroder New Growth Mixed Securities Investment Fund (519736) (hereinafter referred to as "Bocom New Growth") continued to increase its position, making the stock the tenth largest holding in the fund.
Impacted by the real estate market and rising raw material costs, the annual report data shows that for the full year of last year, the company achieved an operating income of 11.2 billion yuan, a year-on-year increase of 9.06%; net profit was 1.733 billion yuan, a year-on-year increase of 10.2%.
Looking at the business segments, in 2023, Robam Appliances' range hoods and gas stoves revenue increased by 10.13% and 8.71% year-on-year, reaching 5.322 billion yuan and 2.671 billion yuan, respectively, with gross profit margins rising to 53.99% and 55.77%, respectively; dishwashers, water heaters, and integrated stoves revenue increased by 27.9%, 21.17%, and 20.58%, respectively; while the revenue from disinfection cabinets, combination steam and bake units, steamers, ovens, and water purifiers declined.
Robam Appliances plans to distribute a special dividend of 5 yuan (tax-inclusive) per 10 shares again after distributing a special dividend of 5 yuan (tax-inclusive) per 10 shares in January of this year, with a total dividend payout of about 940 million yuan for both distributions.
Compared to the full year of last year, the profit growth rate of Robam Appliances in the first quarter of this year has significantly decreased.
The first-quarter report shows that the company achieved an operating income of 2.237 billion yuan for the quarter, a year-on-year increase of 2.75%; it achieved a net profit of 398 million yuan, a year-on-year increase of 2.49%; the net operating cash flow of 54.8876 million yuan plummeted, a year-on-year decrease of 69.8%.
Huatai Securities analysis indicates that in the first quarter of this year, Robam Appliances' gross margin was 50.65%, a year-on-year decrease of 4.14 percentage points, mainly due to the rise in raw material prices compared to the same period last year. Robam Appliances also stated that the main reason was the increase in the purchase of goods and payment of salaries.This year, copper prices have surged again. Industry insiders believe that the rise in raw material prices is eroding the profits of home appliance companies. Currently, the futures price of copper on the Shanghai Futures Exchange has broken through 80,000 yuan/ton, while aluminum has broken through 20,000 yuan/ton.
Regarding the significant slowdown in the first-quarter performance growth of Robam, a senior executive of a home appliance company analyzed to Yicai that, as a post-housing industry, the home appliance category most affected by real estate is kitchen appliances. The real estate transactions in the first quarter remained sluggish, and in terms of costs, the prices of raw materials such as copper and aluminum have risen sharply, and it is expected that kitchen appliance companies will continue to face pressure in their second-quarter performance.
Last year, the income from the project channel was close to zero growth.
"In 2023, after five consecutive years of decline, the kitchen appliance industry has welcomed a recovery. The demand for kitchen appliance upgrades began to be gradually released, and the overall sales of the industry have improved, but it has shown a pattern of the strong getting stronger," said Robam.
Robam's annual report also explained the general situation of the project channel industry, which is greatly affected by real estate: According to the monitoring data of AVC (Aowei Yunwang), the overall kitchen appliances (range hoods, stoves, disinfection cabinets, dishwashers, single-function machines, integrated machines) in the hardcover market opened 1,524 projects, a year-on-year decline of 21.2%, with a market size of 2.5315 million sets, a year-on-year decline of 32.9%.
In 2023, Robam's agency model revenue was 2.923 billion yuan, and the project channel revenue was 2.075 billion yuan, accounting for 44.62% of the total annual operating income. In the same period of the previous year, the company's agency model revenue was 2.446 billion yuan, and the project channel revenue was 2.058 billion yuan, accounting for 43.86%.
According to the above data, the project channel, which accounts for nearly 20% of the operating income, had an income close to zero growth last year.
According to the online report of AVC, in 2023, the market share of the Robam brand kitchen appliance package retail sales was 31.5%, an increase of 1 percentage point year-on-year. The offline report of AVC shows that the market share of the Robam brand range hoods, gas stoves, and built-in dishwashers in retail sales were 31%, 30%, and 19.6%, respectively, maintaining the leading position in the industry. The real estate report of AVC (Aowei Yunwang) shows that the "Robam" brand has a market share of 31.9% in the hardcover channel, ranking first in the industry.
Bank of Communications New Growth has become the fourth largest shareholder.
Both Temasek and the company's management have made precise high-selling and low-buying operations on Robam. In the first quarter of 2024, Temasek slightly reduced its holdings of the stock by 315,500 shares, and the number of shares held at the end of the quarter was 16.95 million shares.Previously, Temasek and the executives of Robam Appliances had both reduced their holdings in the stock.
On July 8, 2021, the share price of Robam Appliances peaked at 49.05 yuan, and Temasek exited the top ten shareholders of the company in the third quarter of that year. Subsequently, Temasek added to its position in Robam Appliances several times during periods of low stock prices, until it slightly reduced its holdings in the first quarter of this year. Earlier, Robam Appliances' General Manager Ren Fujia and six other directors and supervisors also reduced their holdings in the company by a total of 2.76 million shares in June 2021, with Ren Fujia reducing his holdings by 700,000 shares at a reduction price of around 43 yuan, which is nearly double the latest closing price of the stock.
Meanwhile, some public mutual funds have been increasing their holdings. In the first quarter, Bank of Communications New Growth significantly increased its holdings to become the fourth largest shareholder of Robam Appliances, holding 14.31 million shares as of the end of March, with a shareholding ratio of 1.51%, making it the tenth largest heavy stock of the fund, accounting for 4.3% of the fund's net asset value. Currently, the fund is managed by Wang Chong, with a scale close to 8 billion yuan.
Why did the fund significantly increase its holdings in Robam Appliances? In the fund's quarterly report, Wang Chong provided his reasons.
Wang Chong stated that as the economic and industry's overall demand growth slows down, corporate capital expenditures decrease, equity financing needs reduce, dividend rates increase, the competitive landscape becomes more stable, and the ROE (Return on Equity) remains stable with a slight increase. The annualized return rate of future equity assets is expected to exceed the stock market returns during the past period of extensive high economic growth. The A-share market is expected to shift towards an "investment market" dominated by dividends.
Data shows that from 2021 to 2023, Robam Appliances' Return on Equity was 15.78%, 17.21%, and 16.78%, respectively.