On the 1st and 30th of 2024, I really want you to release the 2023 performance forecast.

Key points of investment

Revenue growth was impressive, and net profit and losses were drastically reduced

According to the announcement, the company's revenue in 2023 is estimated to be 1,777 billion yuan, an increase of 27%. The main reason is that the company began business breakthroughs in strategic upgrade/large product development/channel expansion, etc., and achieved steady growth in various channels. Net profit loss due to net profit loss of 0.50-30 million yuan, year-on-year loss of 0.60-40 million yuan after deducting non-attributable net profit loss. Due to rapid revenue growth, amortization expenses on fixed assets, combined with a decrease in the company's expense ratio, net profit achieved a significant reduction in net profit, but the company's gross profit was insufficient to cover period expenses, causing the company to continue to lose money in 2023. Among them, the 2023Q4 company expects revenue of 686 million yuan, an increase of 61%; net profit loss to mother of 0.09 to profit of 0.11 million yuan, a year-on-year decrease of loss; net profit loss of 0.05 to profit of 0.15 billion yuan after deducting non-return net profit loss of 0.05 to profit of 0.15 billion yuan.

The hyperbolic strategy has paid off well. The multi-channel layout has steadily promoted the company's hyperbolic strategy. The first curve focuses on the gift business, upgrading high-quality products such as imperial jujujube, and achieving steady growth in performance through preferential channels such as monopoly/e-commerce; the second curve focuses on building a large single product business, focusing on building a large single product group, and achieved rapid growth in performance through channels such as e-commerce, offline supermarkets, convenience stores, snacks/distribution, etc., and the revenue of the Dadan Pinhong Xiaopai series products exceeded 200 million yuan in 2023. Through hyperbolic collaborative development, while enriching product categories, the company focuses on major core products, accelerates channel layout, and achieves online leadership, live streaming, and offline roots. All channels have achieved good growth.

Profit forecasting

We are optimistic about the company's products and channels with two-wheel drive, and large single products continue to lead growth.

According to the performance forecast and changes in share capital, we adjusted the 2023-2025 EPS to -0.10/0.07/0.14 yuan (previous values were 0.01/0.08/0.13 yuan, respectively). The current stock price corresponds to PE of -70/97/46 times, respectively, to maintain a “buy” investment rating.

Risk warning

Macroeconomic downturn risks, rising raw materials risks, new product growth falling short of expectations, etc.