3Q23 profits are higher than market expectations
1Q-3Q23 realized operating income of 4.582 billion yuan, year-on-year-14.07%, net profit of 170 million yuan, + 81.42% year-on-year, and non-net profit of 86 million yuan, + 198.85%. 3Q23 realized operating income of 1.689 billion yuan, + 38.56% year-on-year; net profit of 16 million yuan, + 40.86%; and non-return net profit of 12 million yuan, + 175.39% year-on-year. 3Q23 revenue and profit performance exceeded market expectations, mainly related to the volume of online emerging channels and the overall recovery of rapid growth online.
Trend of development
The income of the three squirrels in 3Q23 is + 38.56% compared with the same period last year, which shows a bright performance, and the online channel returns to a faster growth rate.
According to the data of the third-party fuel count platform, in September, the GMV growth rate of the three squirrels brand Tmall + JD.com + Douyin platform returned to a faster growth rate than the same period last year, among which Douyin channel due to the obvious 3Q volume under the company's cost-effective strategy, representative products such as daily nuts sold in volume (500g pack activity price less than 30 yuan) and so on. We estimate that the revenue of the new distribution channel in the offline channel of 3Q23 will still maintain a steady growth of about 20%, and the channel revenue of offline stores still has a gap, mainly due to the limited contribution of the existing brand stores and community snack stores.
The net interest rate of 3Q23 is about 0.9%, which is basically the same as the same period last year. The net interest rate of the three squirrels fluctuated greatly from season to season, with 1Q being the highest net interest rate node (during the New year Festival). 3Q23's gross profit margin is about 24.35%, year-on-year-2.2ppt, and sales / management expense rates are about 19.3%, 3.0%, respectively, year-on-year-1.4ppt and-2.4ppt, in line with the reform trend of the company's ex-factory price to benefit consumers and cost efficiency.
4Q23 affected by the Spring Festival dislocation income growth rate will be under pressure, 2024 will continue to promote online channel growth and offline community snack store promotion. The Spring Festival in 2024 is relatively late, and the delivery time of the New year goods Festival is too late, which will have a certain pressure on 4Q income growth. At present, the company still maintains the target of nearly 1000 private brand community stores in 2024.
Profit forecast and valuation
We maintain 23-year profit forecast, taking into account the "high-end performance-to-price ratio" strategy under the 3Q23 online channel recovery is good, we estimate that online channels are expected to maintain the growth trend in 2024, we raised our 24-year profit forecast by 5.0% to 284 million yuan. The current stock price corresponds to the price of 2023 Placer E in 2024, which is 37.2 Unix 24.9 times. We keep the target price unchanged at 21.5 yuan and keep winning. The target price for 2023 Universe E is 30 times for 2023 Universe, and corresponding to 21.9% upstream space.
Risk
The channel growth is less than expected and the food safety risk.