Incidents:
Jiayi Co., Ltd. announced its 2023 results report. In 2023, the company achieved net profit of 4.7 billion yuan, YoY +73.6%; net profit after deducting non-return to mother of 4.7 billion yuan, YoY +71.7%. After conversion, the company achieved net profit attributable to mother of 160 million yuan, YoY +51.6%; net profit after deducting non-return to mother of 140 million yuan, YoY +38.9% in a single quarter. The company's 2023Q4 single-quarter performance increased significantly under a high base, mainly because the main products of the Stanley brand are still popular in the US, which is beneficial to the continued fullness of Jiayi orders. It is worth noting that the company announced the 2023 profit distribution plan, with a cash dividend of 20 yuan for every 10 shares, with a dividend rate of 44.1%.
The share of major customers increased, and gross margin reached an all-time peak:
The gross profit margin of Jiayi Co., Ltd. in 2023 was 40.7%, YOY+6.5 pct, converted to 2023Q4. The company's gross profit margin ratio in a single quarter was 43.7% and YOY+5.5 pct. The gross margin performance all reached record highs. The gross margin performance of Jiayi Co., Ltd. is impressive. We think it is mainly because the share of the largest customer increased significantly. According to the company's annual report data, the company's largest customer accounted for 84.9% of sales in 2023, YoY+16.6pct. Production styles are concentrated, and the scale effect is evident.
Hot products continue to sell, and Jiayi orders are expected to remain high:
The revenue and performance of Jiayi Co., Ltd. in the four quarters of 2023 were impressive, mainly because Quencher thermos mugs owned by major customer Stanley were popular in the North American market. According to our continuous tracking over the past year, the Quencher series thermos cups on the Amazon platform in the US are limited in purchase and out of stock, reflecting the popularity of the product in the North American market. According to information from the Amazon platform on March 31, the current Quencher thermos mug series is still limited to two, and some colors of the small-capacity (14 oz and 20 oz) cup types are still out of stock. From this, it can be determined that Quencher is still popular in the North American market, and the high level of orders from Jiayi is expected to continue.
Investment advice:
Jiayi Co., Ltd. is a leading manufacturer of thermos cups and pots. Product sales from major overseas customers continue to be booming, which is beneficial to Jiayi's order performance. Maintaining a buy-A investment rating, the company was given 15x PE in 2024, with a target price of 84.15 yuan for 6 months.
Risk warning: raw material prices rise, industry competition intensifies, exchange rate fluctuation risk