Revenue grew at an accelerated pace, and operating results in the fourth quarter reached the highest level in the same period. The company achieved revenue of 3.2 billion/ +10.3% in 2023, net profit attributable to mother of 410 million/ +41.4%, net profit after deducting non-attributable net profit of 390 million/ +40.6%.
Among them, Q4 revenue was 710,000 million/ +20.2%, net profit attributable to mother was 60 million/ +140.1%, and net profit of non-return to mother was 0.4 million/ +103.4%. The company plans to pay a cash dividend of 5.5 yuan for every 10 shares, with a cash dividend rate of 51%.
In 2023, the company's revenue ushered in accelerated quarterly growth, and Q4 returned to a high growth rate of more than 20%; profits recovered well, and operating results reached the highest level in the same period.
Domestic sales are steady, and export sales are rising. The company achieved rapid growth in export sales revenue in 2023, +41.0% to 970 million yuan over the same period last year. Among them, commercial refrigerated display cases achieved rapid growth and steady growth in refrigerated display cases. Domestic sales revenue remained flat, reaching 2.14 billion yuan. Among them, commercial refrigerated display cases maintained a leading position, and refrigerated display case sales achieved relatively rapid growth.
Refrigerated display cases are growing rapidly, and the increase in volume is clearly driving. In 2023, the company's commercial refrigerated display cabinet revenue increased 17.9% year-on-year to 2.08 billion, refrigerated display cabinet revenue increased 5.1% to 570 million, supermarket display cabinet revenue fell 30.6% to 220 million, and commercial smart vending machine revenue increased 9.5% to 180 million yuan. Among them, the decline in supermarket display cabinet revenue is expected to be mainly affected by individual customer business changes. Looking at volume and price splitting, the company's commercial display case sales in 2023 increased 11.9% year on year to 1.278 million units; the average price was affected by the drop in raw material prices, down 1.4% year on year to 2507 yuan/unit.
Gross margin continued to increase year over year, and Q4 earnings recovered well. The company's gross margin in 2023 was +6.0pct yoy to 19.4%, of which Q4 was +4.8pct yoy to 29.3%. The increase in gross margin is mainly due to high gross margin commercial refrigerated display cases and an increase in the share of export revenue, a decrease in raw material costs, and optimization of the product structure. The gross margin of the company's commercial refrigerated display cabinet business was +6.3 pct to 34.5% year on year, the gross margin of refrigerated display cases was -1.4 pct to 14.6% year on year, the gross margin of supermarket display cases was +5.6 pct to 17.2% year on year, and the gross margin of commercial smart vending machines was +9.5 pct to 30.7% year on year. Q4 The company's sales/R&D/management expense ratios were +4.8/-2.7/+0.2pct to 13.4%/4.3%/4.4%, respectively. The increase in sales expenses was mainly due to the company increasing its market development efforts. Free prototypes and sales staff remuneration increased rapidly, while sales and after-sales expenses increased. The Q4 financial expense ratio declined due to exchange gains and losses, from -1.2pct to -0.2% year over year; the total cost ratio for the Q4 period was +1.1 pct year over year. Driven by the increase in gross margin, the company's Q4 net profit margin was +4.1pct year-on-year to 8.1%, and profitability improved markedly.
Risk warning: industry competition intensifies; raw material prices fluctuate; industry demand recovery falls short of expectations.
Investment advice: Adjust profit forecasts to maintain a “buy” rating.
Hairong Cold Chain is a leader in the commercial cold chain industry in China. With its R&D, production and scale advantages, it is expected to continue to develop domestic and foreign customers and develop low-share potential categories such as refrigeration. After adjusting the profit forecast, the company's net profit for 2024-2026 is estimated to be 50,000/58/ 660 million (previous value: 50/ 58/- 100 million), with a growth rate of +20%/+17%/+14%, corresponding to PE = 13/11/9x, maintaining a “buy” rating.