3Q23 performance is in line with our expectations
The company released the third quarter results: the company's income in the first three quarters was 591 million yuan, the net profit was 64 million yuan, and the non-return net profit was 63 million yuan. Single 3Q23 revenue / sales / ASP/ ton cost year-on-year + 4.2 0.6/-2.5/-0.3/+3.0/+3.1ppt revenue / volume / ASP/ ton cost year-on-year + 4.2 0.6/-2.5/-0.3/+3.0/+3.1ppt sales / sales / management expense rate / return net profit / deduction non-return net profit margin respectively year-on-year-0.6/-2.5/-0.3/+3.0/+3.1ppt. This performance is in line with our expectations.
Trend of development
The consumption power of night show channels in Daquanzhou area is under pressure periodically, which leads to the pressure of structural upgrading. The resilience of the night show in South China in the same period last year was better than the overall national level, resulting in a higher base in the same period last year; superimposed typhoon weather in July and August this year brought more Rain Water, slightly lighter peak season, especially Rain Water weather had a greater impact on catering channels, resulting in slight pressure on the sales of middle and high-end products; at the same time, the spending power of the high-end consumer channels represented by the night show this year was under pressure, resulting in a year-on-year decline in the company's 3Q single-quarter ASP. However, the company's channel fine management has still been greatly improved, and the overall sales volume has achieved a year-on-year growth of 6% in a single quarter of 3Q, which is much higher than the industry average.
The company promotes the profitability by reducing the cost and increasing the efficiency. Due to the pressure of upgrading the 3Q23 structure, although the cost per ton decreased slightly, it could not cope with the impact of the decline in gross profit margin, which fell 0.6ppt in the third quarter compared with the same period last year. However, by improving the use efficiency of expenses and management efficiency, the rate of sales expenses and management expenses in the third quarter decreased 2.5ppt and 0.3ppt compared with the same period last year, driving the net interest rate of homing in the third quarter to boost 3ppt compared with the same period last year, and the profitability reached a new high in recent years.
We expect that costs will fall in the coming year, and the structure can still be upgraded slowly. The company continues to promote digital and intelligent transformation, carries out the transformation of energy-saving facilities and tackles key technical problems, and there is still much room for savings in cost efficiency in the future. Based on the company's low profit base and large room for improvement, we expect the company's profit growth rate to significantly exceed the industry average in the next three years.
Profit forecast and valuation
We estimate that the company's 2023Compact 2024 net profit will be RMB 0.53 billion and CAGR 33.5% respectively. We keep the profit forecast assumption unchanged, but due to the downward movement of the valuation center of the industry as a whole, we lower the target price by 19.3% to 11.30 yuan, corresponding to the 2023 Universe, which corresponds to the 2023 Universe, and the current share price corresponds to the 2023 Placement, which corresponds to the 45xPmax E in the 24th year. There is 17.8% upside room compared to the target price, and the industry rating is maintained.
Risk
The effect of product structure adjustment is not as expected, food safety problems, raw material price fluctuations, intensified competition and so on.