2023H1's revenue / homing net profit is-1.9% compared with the same period last year. Benefit from the decline in milk prices in the first half of the year-reducing costs and promoting efficiency, and the company's profitability has improved significantly. Looking forward to 2023H1, in the context of a low base in the same period, the company's revenue is expected to improve compared with H1, and the effectiveness of reducing costs and efficiency continues to promote the company's profitability to remain robust.
2023H1's revenue / homing net profit is-1.9% compared with the same period last year. The annual operating income of 2023H1 is 14.14 billion yuan (year-on-year-1.9%), and the net profit is 340 million yuan (+ 20.1%), of which 2023Q2 income is 7.07 billion yuan (year-on-year-1.3%) and net profit is 150 million yuan (+ 30.1%).
2023H1, affected by the slow recovery of downstream demand, the company's income is slightly under pressure; the company continues to promote cost reduction and efficiency, digital empowerment to improve the efficiency of the whole industry chain, superimposed 2022Q2 low base-2023Q2 joint venture reduced losses, and the company's profits improved significantly.
Weak demand leads to low performance of liquid milk and other dairy products, with significant growth in Shanghai from a low base. 1) from the perspective of business, 2023H1's income from liquid milk / other dairy products / animal husbandry is 80.19 billion yuan, compared with the same period last year, + 3.1%, 5.1%, 27.2%, of which 2023Q2 liquid milk / other dairy products / animal husbandry income is 39.320.45.8 billion yuan, compared with the same period last year + 5.4%, 9.8%, 23.5%. The weak demand for 2023H1 dairy products is a drag on the company's liquid milk and other dairy business. The company's animal husbandry is under obvious pressure due to the rise in feed prices and the decline in raw milk prices. 2) from a regional point of view, 2023H1's Shanghai / non-local / overseas income is 3.76 billion yuan, year-on-year + 1.7%, + 1.7%, 4.5%, 0.6%, of which 2023Q2 Shanghai / field / overseas income is 20.3, 31.0, 19.0 billion yuan, year-on-year + 11.1%, 2.8%, 8.9%. 2023H1 achieved relatively rapid revenue growth in Shanghai, mainly due to the low base affected by the epidemic in the same period last year, and the improvement in the performance of New Wright promoted a small increase in overseas income.
The company's endogenous profitability has improved, and the profit of New Wright & Mavericks has declined. 2023H1, the gross sales difference of the company is 8.0%, year-on-year + 1.0Pct, of which Q2 gross sales difference is year-on-year + 0.3Pct, raw material cost is reduced & the decrease of expenses promotes the improvement of the gross sales margin of the company The company management + R & D / financial expense rate is 3.6%, 0.8%, year-on-year + 0.7/+0.3Pct, of which the Q2 company management + R & D / financial expense rate is 3.8%, 0.8%, year-on-year + 0.8/+0.3Pct. The increase in the salary of the company's employees promotes the improvement of sales expenses. 2023H1's home net interest rate / deduction non-net interest rate is 2.4%, 2.2%, year-on-year + 0.4/+0.6Pct, of which Q2 home net interest rate / deduction non-net interest rate is 2.1%, 2.0%, year-on-year + 0.5/+0.6Pct, profitability is significantly improved. 2023H1 New Wright revenue / net profit year-on-year + 0.4% CPM 33.39% to 3.77 billion RMB0.08 billion, of which revenue remains stable mainly due to New Wright's continuous optimization and adjustment of product portfolio and continuous improvement of operating capacity in the context of rising commodity prices; profit pressure is mainly due to the impact of information system input on operational stability and the rise in raw material costs Dragged down by weak downstream demand, 2023H1 calves' income / net profit was-8.7% compared with the same period last year. The pressure on the new Wright profit caused the company's Q2 net profit to be-4.3% to 180 million yuan year-on-year, but the translation difference in foreign currency financial statements increased, and the company's Q2 net profit increased by 30% compared with the same period last year.
H2 company's revenue is expected to improve month-on-month compared with H1, profit to maintain steady growth. Taking into account the company's low 2022H2 revenue base and industry demand is expected to pick up, we expect H2 revenue is expected to improve compared with H1.
The company's cost reduction and efficiency results continue to show, superimposed with lower raw milk prices upstream, we expect H2 company profitability to remain robust.
Risk factors: food safety risk; risk of declining prosperity of the industry; risk of sharp rise in raw material prices; risk that the company's production capacity expansion does not meet expectations; the risk of internal reform falling short of expectations.
Investment advice: taking into account the weak demand in the industry and the drag on the company's profits, we downgrade the company's annual return net profit forecast for 2023-24-25 to 6.3pm 70,000,000 yuan (the original forecast is 6.8pm 780,000,000 yuan), and the current share price corresponds to PE 24x/21x/19x.