In 2022, the company achieved net profit of 67 million yuan, an increase of 391.5% over the previous year. The company disclosed its 2022 annual report: in 2022, the company achieved revenue of 1,887 million yuan, an increase of 1.8% over the previous year, and achieved net profit of 129 million yuan, an increase of 19.8% over the previous year; among them, 2022Q4 achieved revenue of 377 million yuan, a year-on-year decrease of 27.5%; Guimo's net profit was 34 million yuan, an increase of 27.5% over the previous year.
Pet products exports are under pressure, and focus on the inflection point of overseas inventory removal
By category, in 2022, the company's pet products business achieved revenue of 1,349 million yuan, down 9.8% from the previous year. Among them, pet litter revenue was 273 million yuan, down 23.3% year on year, cat crawler revenue was 378 million yuan, down 6.0% year on year, and pet toy revenue was 307 million yuan, down 16.7% year on year. Benefiting from channel construction results and high-end domestic pet food trends, the company's pet food business achieved revenue of 511 million yuan in 2022, an increase of 54.0% over the previous year.
By region, the company's overseas sales revenue in 2022 was 1,187 billion yuan, a year-on-year decrease of 10.1%. This was mainly due to limited shipping conditions combined with high inflation overseas customers removing inventories. Domestic sales revenue was 699 million yuan, an increase of 31.2% over the previous year, accounting for 37.1% of revenue, an increase of 8.3 percentage points over the previous year, mainly due to the sharp increase in the company's pet food business.
Benefiting from exchange rate changes and pet food business profit growth, the company's gross margin improved year-on-year. Looking at profit margins, the company's comprehensive gross profit margin in 2022 was 20.0%, an increase of 1.6 percentage points over the previous year, mainly due to changes in the RMB exchange rate superimposed by the sharp increase in the gross margin of the pet food agent business. Among them, the gross profit margin of the pet products business was 21.7%, an increase of 0.9 percentage points over the previous year; the gross profit margin of the pet food business was 14.8%, an increase of 7.5 percentage points over the previous year, mainly due to the depreciation of the RMB exchange rate against the US dollar compounded by a decrease in the pet food brand's agency hierarchy.
On the cost side, in 2022, the company's sales expenses were 136 million yuan, an increase of 18.4% over the previous year; management expenses were 643543 million yuan, an increase of 13.6% over the previous year. Financial expenses - 177.722 million yuan, a year-on-year change of -188.7%, mainly due to the depreciation of the RMB exchange rate against the US dollar, which contributed to exchange earnings; R&D expenses were invested 18.933 million yuan, an increase of 5.6% over the previous year.
In terms of collaborative sales of supplies and food to accelerate the deployment of domestic business in the global supply chain, the company adopted a collaborative development strategy for pet food and pet products, imported pet food from internationally renowned brands through a cross-border e-commerce model, and carried out multi-channel sales of food-driven products domestically. In terms of overseas business, the company continues to strengthen the construction and improvement of the global supply chain management system. While developing localized services for overseas sales, the company concentrates major resources to expand customers and promote the company's overseas brands and domestic brands in an orderly manner.
Investment advice
Tianyuan Pet is a full-range, large-scale comprehensive pet product provider in China. In terms of pet products, with the continuous development of overseas customers and the gradual digestion of customer inventories, the company's supplies business is expected to improve marginally; in terms of pet food, the company's development strategy to drive products and expand domestic channels is progressing well. Benefiting from channel construction results and the trend of high-end domestic pet food, the company's pet food business is expected to maintain a high growth rate. We expect the company to achieve revenue of 2,148 million yuan, 2,631 million yuan, and 3.268 million yuan in 2023-2025, up 13.8%, 22.5% and 24.2% year on year, corresponding to net profit of 140 million yuan, 169 million yuan and 218 million yuan, with year-on-year growth rates of 9.2%, 20.0%, 29.1%, corresponding to EPS of 1.56 yuan, 1.87 yuan and 2.42 yuan respectively, maintaining the “increase in holdings” rating.
Risk warning
The risk of changes in the environment in overseas markets; the risk of developing and promoting new products; the risk of authorized operation of pet food; risk of exchange rate fluctuations, etc.