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百果园集团(2411.HK):渠道布局拓广拓深 自有产品强化品牌

Baiguoyuan Group (2411.HK): Expanding channel layout and deepening its own products to strengthen brands

廣發證券 ·  Aug 28, 2023 00:00

Baiguoyuan 1H23's revenue increased 6.4% year on year to 6.294 billion yuan (RMB, same below), 1H23non-IFRS net profit was 253 million yuan, up 23.5% year on year, and net interest rate increased by 0.5 pct to 4.0% year on year.

In terms of channel brands, the company's store layout continues to expand and expand, franchisees are very willing to open stores, and the store opening strategy combines existing cities with encrypted stores and new city expansion stores. As of 1H23, the company had 5958 stores, with a net year-on-year increase of 507 stores in 1H23.

In terms of product brands, the company continues to empower upstream to create differentiated products, launch new proprietary products and upgrade its own brands. As of 1H23, the company has successfully launched 35 of its own product brands into the market, a net increase of 4 brands. Sales of private label fruit increased 27% year over year, and the share of sales increased by 2 pct to 14% year on year. The company plans to build 100 brands in the next 5-10 years. Meanwhile, the company 1H23 developed the first National Brand brand “Sweet Moon” banana.

The company actively expands customers online and strengthens brand building and private domain operations. The number of paid 1H23 members reached 1.41 million, an increase of 40% over the previous year, and the monthly membership account for 23%. At the same time, the company is actively developing To-B business, etc., actively promoting the sale of high-quality domestic fruits overseas, opening up room for revenue growth.

Profit forecast and investment suggestions: We expect the company to achieve overall revenue of 125.5/139.4/15.49 billion yuan in 2023-2025, a year-on-year change of 11.0%/11.0%/11.1%; non-IFRS net profit is 4.2/5.1/588 billion yuan, respectively, and 23.5%/22.4%/14.0% year-on-year in 23-25.

Referring to the valuations of comparable companies, considering that the future growth of the company's main fruit category online and offline channels is highly certain, the company was given a 2023 25x PE valuation, with a reasonable value of 7.18 HKD/share, and a “buy” rating.

Risk warning: product quality control risk, market competition risk, overseas fruit operation risk, etc.

The translation is provided by third-party software.


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