Finance Association, January 23 (Reporter Chen Kang) Panda Dairy (300898.SZ), the “first stock of condensed milk”, also announced an advance increase in 2023 results and a change in the use of some funds raised. The company expects net profit of 100 million yuan to 110 million yuan in 2023, an increase of 89.11% to 105.96% over the previous year; the capital raised will be prioritized for the production of 30,000 tons of concentrated dairy products in Cangnan.

According to the announcement, in addition to “the continued steady growth of the company's main business”, the reason for the increase in performance in 2023 was also “the price of main raw materials fell and the company's operating costs decreased”. During the reporting period, the gross margin of the company's products increased.

Panda Dairy's net profit declined year-on-year for two consecutive years in 2021 and 2022, which was affected by the continued high price of the main ingredients. The company's products are mainly dairy products such as condensed milk, cheese, and whipped cream. The core raw materials are milk powder and sugar. In 2022, under pressure from the cost side, the company initiated a 3%-10% price increase for major condensed milk products at the beginning of the year, but the gross margin for the whole year still fell 4.18 percentage points to 19.27% year on year.

The Panda brand originated from COFCO., and Panda Dairy was listed on October 16, 2020. According to the prospectus, it is proposed to publicly issue no more than 31 million shares and to raise 552 million yuan in capital, mainly for the Cangnan concentrated dairy product production project with an annual output of 30,000 tons and the Jiyang Phase II concentrated dairy products project, marketing and application center project with an annual output of 20,000 tons.

Concentrated dairy products are the company's main source of business. Since the actual net amount of capital raised is less than the amount of capital raised, the company decided to prioritize the 278 million yuan raised in the construction of a concentrated dairy product production project with an annual output of 30,000 tons in Cangnan. There is still some capital raised after the construction of the project is completed. At that time, it will be invested in the Jiyang Phase II project according to actual demand.

At the same time, the company decided to use the capital raised to increase capital by 40 million yuan to Shandong Panda Dairy Co., Ltd., a wholly-owned subsidiary, to implement the new Shandong Panda Dairy Co., Ltd. beverage and condiment product optimization and upgrading project. The new project includes the development and production of jelly, jam, bean jelly, and beverage businesses. The project achieved an annual output of 80 million tons and an annual net profit of 8 million yuan after delivery.

This project targets various food and beverage markets. Currently, the company's downstream customers are mainly food processing companies, bakeries, restaurants, drink shops, and household consumption. The company explained last year, “For catering channels, the main product is sweetened condensed milk, and we are considering expanding the product range in the future; the main product in the beverage channel is condensed milk.”