The company released its 2023 annual report
Achieved revenue of $3.379 billion in '23, +2.3% year on year; net profit to mother of 408 million, +12.5% year on year; net profit after deducting non-return to mother of 385 million, +19.7% year on year;
23Q4 achieved revenue of $90 billion, -1.7% YoY; net profit to mother of $115 million, +2.0% YoY; net profit without return to mother of $104 million, +23.1% YoY.
Consumer demand was weak and industry competition intensified in '23. The company accelerated product innovation, reduced costs and increased efficiency, enhanced market competitiveness, and maintained a good development momentum in the face of adversity.
The short-term price of color printing packaging is under pressure, and the volume of film continues to be released
Color printing and composite packaging: revenue of 23 billion yuan, -0.05% year over year, volume/price +4.2%/-4.0% year on year, respectively, gross margin of 27.4%, +3.7 pct year on year. The company focuses on expanding new markets and new businesses, expanding business orders, improving product quality, providing customers with personalized and differentiated products and value-added services, and continuously improving customer satisfaction.
Plastic flexible packaging film: Revenue of $525 million in 23 years, +14.5% year over year, volume/price +44.9%/-21% year on year, respectively, gross margin of 7.9%, -0.1 pct year on year. With the release of the company's 8,000t new functional film material project and 3.3 wt BOPE film production capacity in '23, the raw material self-sufficiency rate is expected to continue to increase.
Overseas distribution+multinational companies are expanding steadily, and international business is expected to accelerate international market revenue by 380 million yuan in 23 years, +7.8% year over year, gross margin of 29.1%, and +4.7 pct year on year.
The company's multinational brand business has grown steadily, breakthroughs have been made in overseas markets, and the market and product structure have been continuously optimized.
Stable profitability, sufficient cash flow, and maintaining a high dividend policy
The company's gross margin in '23 was 24.7%, +2.5pct year on year, net margin was 12.3%, and +1.1 pct year on year. The main reason was the decline in raw material prices. Furthermore, the company continued to optimize all aspects of the supply chain, comprehensively promoted informatization construction, and effectively improved management efficiency. We expect to maintain a steady level of profit.
In '23, the company achieved operating cash flow of 515 million yuan, and the cash flow performance was steady. Furthermore, the company's dividend ratio for 23 years was 82.5%, corresponding to a dividend rate of 5.8% (as of the closing price on February 29), and the high dividend policy continues.
Adjust profit forecasts to maintain “buy” ratings
The company's comprehensive strength is at the forefront of the plastic flexible packaging industry. Based on the annual report data and considering raw material trends, we adjusted the early profit forecast. The net profit forecast for 24-26 is 4.8/5.4/590 million, respectively (the value was 51/60 million before 24-25), and the corresponding PE is 12/11/10X, maintaining a “buy” rating.
Risk warning: raw material prices fluctuate, investment in new projects falls short of expectations, and industry competition increases risk