On October 23, 2023, Panda Dairy released its report for the first three quarters of 2023.
Main points of investment
Revenue is slightly under pressure in the third quarter, enjoying lower costs and dividends
The total revenue of 2023Q1-Q3 is 709 million yuan (10%), the net profit is 82 million yuan (105%); the total revenue of 2023Q3 is 262 million yuan (2%), and the net profit is 35 million yuan (102%). The rapid growth of net profit is mainly due to the development of new customers / new channels under the low base last year. On the profit side, the gross profit margin / net profit rate of 2023Q1-Q3 is 23.40% / 11.21% respectively, which is + 4pct/+5pct compared with the same period last year, and the sales expense rate / management expense rate is 4.54% / 4.67% respectively, which is respectively compared with the same period of last year-1pct/-0.3pct. The gross profit margin / net profit rate of 2023Q3 is 23.33% / 12.52%, respectively, compared with the same period last year + 5pct/+6pct, mainly due to the reduction of raw material costs and the recovery of downstream customers; the sales expense rate / management expense rate is 3.74% / 3.57% respectively, respectively compared with the same period last year-1pct/-1pct.
Promote the sinking of channels and actively create a multi-product matrix
On the product side, the company has formed four category matrices of "condensed milk as the main, cream, cheese and plant-based as the second growth curve". Condensed milk is driven by the upgrading of consumption, and there is a broad space for catering standardization. The growth of the main industry is still strong. The cheese industry is expected to maintain a high demeanor in the future. the company continues to promote new products and improve product quality. it has created a diversified product matrix and will continue to increase R & D investment in the future. On the channel side, the company has added new catering dealers, reduced retail dealers, vigorously promoted the sinking of dealer channels, and actively opened up new retail channels such as Tmall and Douyin to assist the launch of new products in the market. In the future, the company will create Wentai market channels, infiltrate more small retail formats and make effective use of e-commerce sinking to further enhance brand penetration.
Profit forecast
We are optimistic that the company will consolidate the basic market of condensed milk, continue to create the second growth curve, rely on B-end channels and continue to optimize the construction of retail channels. According to the three quarterly reports, we adjusted the EPS for 2023-2025 to 0.81 max 0.96 max 1.13 yuan (the previous value is 0.73 max 0.91 max 1.11 yuan respectively), and the current share price corresponds to PE times 27-23-19, maintaining the "buy" investment rating.
Risk hint
Macroeconomic downside risks, intensified industry competition, rising risks of raw materials, new products & new market development is not as expected.