According to the company's performance forecast, in 2023, the company achieved net profit of 4800-72 million yuan, a year-on-year decrease of 47%-65%; net profit without deduction is expected to fall 90%-93% year on year. According to calculations, net profit to mother fell 271%-562% year on year in 23Q4.
The decline in ToC demand for cheese is expected to benefit from macroeconomic recovery. The company's cheese business revenue has declined. We expect mainly due to the decline in consumer consumption power. As an optional consumer product, ToC demand for cheese sticks will drop significantly. With the recovery of offline traffic after the epidemic, the restaurant scene recovered relatively quickly. ToB products such as cheese for baking are still on the rise and are relatively less affected by consumption power. China recently introduced a series of favorable macroeconomic and real estate policies, which are expected to accelerate macroeconomic recovery; looking ahead to 24, it is expected that residents' income will improve somewhat, and demand for cheese consumption is expected to benefit simultaneously.
The high price of raw materials affected profits, and the profit situation improved marginally. On the profit side, on the one hand, the prices of the main raw materials cheese and butter are at a high level, suppressing gross profit margin; moreover, imports of raw materials such as cheese account for a relatively large share, and fluctuations in the RMB exchange rate in 23 years had a negative impact on profits. On the marginal side, cheese prices have fallen from a high level, and it is expected that the pressure on the company's raw material procurement costs will ease; the RMB is showing an upward trend, which is conducive to reducing exchange losses.
The company actively promotes new channels, optimizes channels, and operates steadily. The company actively develops new products, such as launching fully organic cheese sticks with high calcium content in 2022 to meet the differentiated needs of consumers. The company continues to optimize and cultivate channels, and the retail, catering industry, and e-commerce channels develop in multiple dimensions. By the end of 23H1, the company had 5016 dealers, and the sales network covered about 800,000 retail terminals; the number of dealers decreased by about 200 compared to the end of '22. It is expected that the company will eliminate and optimize dealers, and channel quality will be further improved.
According to the 323 quarterly report, revenue and gross profit margins were lowered for 23-25. Due to a reduction in the revenue base, the ratio of management expenses resulting from equity incentives for 24-25 years increased. We forecast that the company's earnings per share for 2023-2025 will be 0.09, 0.28, and 0.48 yuan, respectively (the original forecast was 0.69, 1.08, and 1.45 yuan). We continued the FCFF valuation method and calculated that the company's equity value was 8.9 billion yuan, corresponding to the target price of 17.36 yuan, and maintained the purchase rating.
Risk warning
There is a risk that competition in the industry will intensify, the recovery of consumer spending power will fall short of expectations, and revenue growth will fall short of expectations.