Incident: The company released its 2023 annual report. In 2023, the company achieved revenue of 3.2 billion yuan, an increase of 10.3% year on year; realized net profit of 410 million yuan, an increase of 41.4% year on year; realized deducted non-net profit of 390 million yuan, an increase of 40.5% year on year. Looking at a single quarter, Q4 achieved revenue of 710 million yuan, an increase of 20.2% year on year; realized net profit of 60 million yuan, an increase of 140.1% year on year; realized net profit of 40 million yuan after deduction, an increase of 103.4% year on year. The company's dividend rate increased in 2023, with a cash dividend of 210 million yuan and a performance dividend rate of 51%.
Refrigerated display cases have achieved rapid growth, leading to a high increase in export sales. In 2023, the company achieved output of 1.367 million units, an increase of 19% year on year; achieved sales volume of 1.304 million units, an increase of 12.2% year on year. By product, the company's refrigerated display cases achieved revenue of 2.08 billion yuan, up 17.9% year on year, and revenue growth was relatively rapid; refrigerated display cases achieved revenue of 570 million yuan, up 5.1% year on year, and customer structure improved; supermarket display cases achieved revenue of 220 million yuan, down 30.6% year on year, mainly due to changes in individual customer business; smart vending machines achieved revenue of 1.76 billion yuan, an increase of 9.5% year on year, due to broadening customer coverage. At a regional level, domestic and foreign sales achieved revenue of 2.14 billion yuan/970 million yuan respectively, up 0.1%/41% year-on-year respectively. The driving force behind the increase in export sales revenue was mainly due to the rapid growth of the refrigerated display case export business.
Increased share of overseas business led to increased profitability. The company's gross margin increased by 6pp to 29.7% year-on-year in 2023. Among them, the gross margins of refrigerated display cases/refrigerated display cases/supermarket display cases/smart vending machines were 34.5%/14.6%/17.2%/30.7%, respectively, +6.3pp/ -1.4pp/+5.6pp/ +9.5pp. The improvement in the company's gross margin mainly comes from an increase in the share of overseas business, a drop in commodity prices and an improvement in product structure; in terms of cost ratio, the company's sales/management/R&D expenses in 2023 were 7.6%/3.3%/3.4%, respectively, +2.4pp/+0.2pp/-0.3pp, respectively. The increase in sales expenses was mainly due to the increase in after-sales expenses caused by direct management of some overseas companies; in terms of net profit margin, the company's net profit margin increased by 2.8pp to 12.9% year on year in 2023.
The domestic position is stable, and foreign refrigeration showcases are growing rapidly. In the domestic market, the company's market position in the commercial refrigerated display case field has remained stable. The refrigerated display case customer structure continues to improve, and product sales have achieved rapid growth; in the foreign market, as the company focuses on promoting overseas business and building overseas teams, overseas continues to grow rapidly, and the future will also be an important driving force for the company's growth.
Profit forecasting and investment advice. In the field of refrigerated display cases, market share and brand influence are in a leading position in the industry. The domestic market basically covers mainstream beverage brands. The high-end beverage industry in North America has a certain market share, and the company's brand influence continues to expand. The company's 2024-2026 EPS is expected to be 1.25 yuan, 1.38 yuan, and 1.56 yuan respectively, maintaining a “holding” rating.
Risk warning: Risks such as customer growth falling short of expectations, consumption falling short of expectations, and increased competition.