Losses decreased year-on-year in 2022, net profit of 23Q1 increased 10.0% year on year. The company announced the 2022 annual report and the first quarter report of 2023:2022 achieved revenue of 5.114 billion yuan, an increase of 14.3% over the previous year, and net profit of 7.57 million yuan, mainly due to the impact of the US subsidiary SSC's business on the US economic environment and not meeting expectations; 2023Q1 achieved operating income of 1,415 million yuan, an increase of 33.2% over the previous year, and Guimo's net profit was 10.411 million yuan, an increase of 10.0% over the previous year.
The balanced development of omni-channels and the rapid growth of the prepared food business
By category, in 2022, the company's aquatic food achieved revenue of 4.828 billion yuan, an increase of 19.0% over the previous year, and gross margin was 14.0%, down 2.39 percentage points from the previous year. Among them, the revenue from the prepared food business was 1,131 billion yuan, an increase of 34.5% over the previous year, mainly due to the continuous renewal and release of high-quality large products. Feed products achieved revenue of 201 million yuan, a year-on-year decrease of 35.4%, mainly due to the company adjusting its production and operation structure to reduce the production and inventory volume of the feed business. Other revenue was 85 million yuan, down 18.8% year on year. By region, the company's domestic revenue in 2022 was 2,464 billion yuan, an increase of 10.3% over the previous year, and foreign revenue was 2,650 million yuan, an increase of 18.3% over the previous year. In terms of channels, the company adheres to balanced omnichannel development. For the B-side (distribution+catering) market, the company adopts a development strategy combining service-oriented marketing and precision marketing; for the C-side (supermarket+e-commerce new retail) market, the company adopts online grass planting and offline grass removal strategies to accumulate customer resources through continuous optimization of the omni-channel marketing system to create a high-quality brand image.
Research, production and marketing are being promoted comprehensively, raising capital to expand production to boost the performance of prepared dishes. The company has rich experience in the fishery industry chain, insists on comprehensively promoting R&D, production and marketing, and building the brand's core competitiveness. It has certain advantages in new product development and iteration, product quality control, large-scale production, and sales channel layout. Faced with the contradiction between the rapid development of the prepared vegetable business and insufficient production capacity, the company expanded production capacity through fixed increases, raised the level of production automation, and enriched the product production matrix. After the project construction is completed, the company is expected to add 24,000 tons of prepared fish and shrimp production capacity, 15,300 tons of crayfish production capacity, and 29,700 tons of deep-processed fish products. The market competitiveness and profitability of the prepared vegetable business are expected to further improve.
Investment advice
Prepared food products are an important development direction for B-side catering companies to achieve standardized supply while reducing costs and increasing efficiency. They are also a better choice for C-side consumers to balance cooking efficiency, food health, and taste. As the recognition and penetration rate of prepared dishes continues to increase in the future, the prepared food industry is expected to accelerate development after the epidemic. Guolian Fisheries divests the drag of upstream aquaculture business and insists on upgrading the business model by focusing on the prepared vegetable industry. The company's performance is expected to continue to grow. Considering the pace of the company's production capacity investment and the operating conditions of overseas SSC companies, we adjusted the 2023-2024 profit forecast and added the 2025 profit forecast. The company's revenue for 2023-2025 is estimated to be 6.084 billion yuan, 7.155 billion yuan, 8.326 billion yuan (the previous value of 2023-2024 was 6.106 billion yuan, 7.131 billion yuan), an increase of 19.0 billion yuan over the previous year %, 17.6%, and 16.4%, corresponding to net profit attributable to the mother of 119 million yuan, 226 million yuan, and 330 million yuan (pre-2023-2024 values of 167 million yuan and 265 million yuan), up 1675.9%, 89.2%, and 46.1%, corresponding to EPS were 0.11 yuan, 0.20 yuan, and 0.29 yuan respectively. Keep the “buy” rating unchanged.
Risk warning
Risk of changes in prices of raw materials and products; risk of food quality and safety; risk of new product promotion not meeting expectations; risk of production capacity not being absorbed as expected.