【行业研究报告】JS环球生活-1Q23 results beat and expect gradual recovery

11May2023
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
JSGlobalLifestyle(1691HK)
1Q23resultsbeatandexpectgradualrecovery
1Q23wasaslightbeat,mostlyduetorocketedsalesgrowthintheEU.Evenwith
noFY23Eguidanceprovided,wedothinkrapidgrowthintheEUwillstay,sales
growthintheUSshallimprove,togetherwiththetailwindsinmargins(e.g.
cheaperinputcostsandfreightrate,betterdiscounts).WestillhaveaBUYrating
withTPofHK$9.92,basedon11xFY23EP/E,vs5yearsaverageof14x.
SharkNinjaresumedpositivesalesgrowthin1Q23,slightlybetterthan
expected.SharkNinjarecordeda5.4%YoYincreaseingrosssalesin1Q23,
expected.SharkNinjarecordeda5.4%YoYincreaseingrosssalesin1Q23,
slightlybetterthanourestimatesof“slightdrop”.Whilesalesdeclineof8%in
NorthAmericawasinlinewithourestimates,weattributedthepositive
surprisesto:1)remarkablesalesgrowthof70%inEurope(87%inconstant
FX)and2)successfulramp-upofnewproductsliketheHairdryer,whereits
marketshareshadgoneupto17%,fromjust2%oneyearago.Despite
industryheadwindsintheUS,wearestillencouragedbythereasonable
marketsharesgainbySharkNinja,whichisastrongindicationofitshighly
competitiveproductsandbranding.For1Q23,SharkNinja’smarketsharesin
theUSforCleaning/Foodpreparation/Cookingappliances+0.9ppt/+0.4ppt/
+0.1ppt,anditsmarketsharesintheUKforVacuumcleaners/Electrical
cookingpots/Foodpreparationappliances-1.2ppt/+4.2ppt/+5.4pptYoY.
WedoexpectsequentialimprovementintheUSandChina,rapidgrowth
tostayintheEUandexpansioninAPACtocontinue.Webelievethe
salesgrowth(soastheprofit)inFY23Ecouldbebackloaded(3%/9%sales
growthin1H23E/2H23E)because:1)enddemandisstillhealthyintheUS,
sell-throughsalesgrowthwasat+veMSDwhilesell-insalesdroppedby8%
atthesametimein1Q23,2)de-stockingintheUSmaystillbegreatin1H23E,
butshouldbeeasedin2H23E,3)speedygrowthintheEUislikelytocontinue
(meaningfulmarketsharesgainsinfoodpreparationandcookingappliances),
4)manynewproductsandcategorieswillbelaunchedin2H23E(ontopof
theNinja2in1doublelayeroven,Ninjablackcordlessblender,icecream
maker,cutlery,Sharkrobotmatrix),5)Joyoung’ssaleswasstillunder
pressureinJan-Febduetopandemicandweakenedoverseasdemands,but
turnaroundisratherlikelyin2H23E,and6)expansioninAPACwillremain
fast(Japanmarketalreadybrokeneven,announcedanewretailpartnerin
SouthKoreaandacquiredthedistributionpartnerinAustraliaandNew
Zealand).
MaintainBUYandraisedTPtoHK$9.92.WeliftFY23E/24E/25Enetprofit
forecastsby2%/2%/2%tofactorin:1)greaterdragsonJoyoungduring
pandemic,2)fasterEUsalesgrowthand3)betterGPmarginexpansion
ahead.OurnewTPisbasedon11xFY23EP/E(unchanged).Itsvaluationis
notdemandingat8xFY23EP/E,comparedto5yearsaverageof14x.