Prepared vegetables are still in the golden period of development, maintaining the "overweight" rating.
Delis 2023Q2 achieved a total revenue of 756 million yuan, an increase of 8.36% over the same period last year, and a net profit of 3 million yuan, down 81.27% from the same period last year. Due to the slow recovery of demand, we downgrade the profit forecast for 2023-2025. It is estimated that the return net profit of 2023-2025 will be 0.69 (- 0.21,1.10) and 1.53 (- 0.36) million yuan, and the EPS will be 0.11,0.17,0.24 yuan. The current stock price corresponds to 53.5,33.4,23.9 times of PE. Delis short-term focus on prefabricated food industry B-end, medium-term C-end consumers, with the release of production capacity, from Shandong to the national expansion, to maintain the "overweight" rating.
2023Q2 demand is weak, revenue growth slows, prefabricated food business continues to grow, 2023H1 Delis revenue increased 9.91% year-on-year, by product: (1) revenue from chilled and frozen meat increased by 1.33%; (2) revenue from prefabricated meat increased by 15.89%, the company's channels developed smoothly, and B-end key customers and innovative large items brought increments; (3) low-temperature meat products decreased by 7.37%. (4) Beef trade increased by 94.85%, with an increase of 97 million yuan. 2023Q2's revenue increased by 8.36% compared with the same period last year, which is mainly due to: (1) slow economic recovery and weak consumer demand; (2) after the rapid recovery of 2023Q1, the growth rate of catering slows down, the competition in the prepared food industry is fierce, and the growth rate of prepared vegetable income slows down. Looking forward to 2023H2, the company is actively developing new channels and new products. With the volume of head customer channels such as terminal B Sam, and online joint head anchors sending live broadcast channels with goods, it is expected that the prepared food business can still maintain rapid growth.
Gross profit margin declines and sales rates fall.
2023Q2 homing net profit fell 2.3 pct to 0.2%, of which gross margin fell 0.46 pct to 5.97%. The decline in gross profit margin was mainly due to the rising cost of raw materials. Benefiting from the remarkable effect of the company's cost control, the 2023Q2 sales expense rate decreased by 1.22pct to 2.91% compared with the same period last year, and the management expense rate decreased by 0.49pct to 2.37% year-on-year. Looking forward to 2023, with the improvement of capacity utilization and the continuous improvement of the company's business structure, the gross profit margin is expected to increase in 2023; with the strengthening of cost control and the improvement of cost use efficiency, the 2023 rate is expected to be relatively stable.
Risk tips: capacity investment is not as expected, market expansion is not as expected, raw material price fluctuation risk and so on.