The company released its 2023 annual report:
Q4: Revenue of 1.786 billion (-3.8%), return to mother of -0.07 billion (81 million in the same period).
Q1-4: Revenue of $14.815 billion (+5.5%), back to mother of $1,337 billion (+5.8%).
An early report has been issued before, which is in line with expectations.
At the same time, the company paid 1,355 billion dollars in 23 years, with a dividend rate of 101% (100% last year).
Revenue side: Upgrades are slowing down, but the international & southern regions are bright
Volume and price split: 23A sales volume of 3 million tons (+4.9%), tonnage price of 4818 yuan (+0.5%), Q4 volume +4.8% /price -9.3%, average price decline due to high 22Q4 base and low sales discount.
Price by price: 23A high-end, mainstream, and economic revenue of 8.9 billion/ 5.3 billion/ 300 million respectively, +5.2%/+5.6%/+10.1% year-on-year, with sales volume +4%/+6%/+3.8%. The mainstream price band is the main force for volume growth (expected sales volume of Leborg and heavy beer + high number of units), while high-end overseas Usu and 1664 are still recovering.
By brand: 23A international/local brands each earned 53.82 billion +8%/+4%, and international brands performed better.
Subregion: 23A, Northwest/Central/Southern Districts each had +1%/+3%/+14% revenue. The Southern Region performed well. The 24Q2 Foshan plant was put into operation to mitigate the problem of insufficient production capacity.
Profit side: Costs are rising but expenses are properly controlled
Cost increase: 23A gross profit margin of 49.1% /-1.3 pct, due to the increase in ton costs +3.2%; Q4 gross profit margin of 48.8% year-on-year under a high base -6.8 pct.
Rate decline: 23A net interest rate of +0.02pct to 9.02% year over year, sales rate +0.53 pct, but management/R&D rate is -0.47/ -0.61 pct, and fees are properly controlled.
Investment advice: 24 years of continuous structural upgrades, maintaining “buying”? Our point of view:
Considering the decline in barley costs in '24 and the Q2 production increase in amortization of the Foshan plant, the total cost is expected to remain flat; looking at the upgrading of the company structure, sales volume is expected to remain flat outside the country, and the mainstream price band is still the main force for volume growth. The increase in tonnage prices in 24Q1 allayed concerns about downgrading.
Profit forecast: In 2024-2026, we expect the company to achieve operating income of 158/166/17.6 billion yuan, +6.4%/+5.3%/+5.8%; realized net profit of 15/16/1.8 billion yuan, +11.0%/+7.5% YoY; current stock price corresponding PE is 21/19/18 times, respectively, assuming a 24-year dividend rate of 100% and a dividend rate of 4.8%. The valuation is at a historically low level.
Risk warning:
Demand fell short of expectations, market competition intensified, and raw material costs rose above expectations.