Jinwu Financial News | According to CMB International Development Research Report, Vesync (02148) announced gross sales for the first quarter of '24, with an increase of only 1%. Amazon/non-Amazon channel sales fell 7%/38% year on year, respectively, mainly affected by the shortage of popular products and the slow rate at which Amazon replenished inventory. However, the company's retail traffic still grew healthily by 13% in the first quarter, while the company reduced discounts, promotions and other costs. The bank believes that profit margins and profits will continue to increase in the first quarter.
Looking ahead, the company has not adjusted its full-year guidelines (20% sales growth and net profit margin of 10% or more), but the bank is more conservative (expected sales growth of 15% and net profit margin of about 13% orders), and the current Amazon channel inventory should be less than a month, with subsequent growth or acceleration.
Vesync's current price is 7 times the projected price-earnings ratio for FY24, maintaining a “buy” rating. The target price increased slightly from HK$6.71 to HK$6.79. Considering the compound annual growth rate of 13%/16% sales/net profit over the next 3 years, the bank believes that the current stock price is quite attractive. The dividend rate is 6%, and the current defense is also high.