Incidents:
Jiayi Co., Ltd. released its annual report for 2023. In 2023, the company achieved operating income of 1,775 million yuan (+40.96% year over year); net profit to mother of 472 million yuan (+73.60% year over year); Q4 achieved operating income of 547 million yuan (+29.21% year over year); and net profit to mother of 158 million yuan (+51.55% year over year).
Comment:
The industry is booming, and thermos mugs have become fashionable FMCG products. The main consumer markets for global thermos cups are in developed countries, and the European and North American markets with developed outdoor industries each account for about 25% of the market share, spawning internationally renowned brands such as Stanley and Yeti. Stainless steel thermos cups are more environmentally friendly than disposable containers, and have more and more attributes in outdoor sports, travel, leisure, and social networking; brands, designs, partnerships, and value ideas continue to stimulate consumers in developed countries. The replacement speed and repurchase rate of products have qualitatively changed, and thermos mugs have been upgraded from simple durable consumer goods to fashion, trendy, and fashionable FMCG products with social value.
Single product prices have increased, and gross margin has continued to improve. In 2023, the company's metal products achieved revenue of 1,725 billion yuan (+40.33%), with sales volume of 38.1295 million units (+17.64% year over year). The average single price was 45.2 yuan, an increase of 7.3 yuan/piece compared to the 2022 single price of 37.9 yuan; gross margin was 40.65%, an increase of 7.10pct over the previous year.
Strengthen product development and supply chain management, and increase the stickiness of core customer cooperation. The company's business model focuses on providing OEM and ODM OEM production for famous brands of international thermos cups, and focuses on developing overseas markets. Major international customers are very careful about choosing suppliers. Generally, they do not change easily after entering the supply chain. Due to the personalized and multi-scenario consumption characteristics of thermos cups, suppliers are required to have rapid R&D, design capabilities, rapid production capacity, and quality control capabilities. The company has mastered a variety of ultra-thin stainless steel processing technologies and multiple design patents, and continues to invest in automated and intelligent equipment. Flexible production capacity and efficiency are continuously improving, which helps strengthen the company's depth of cooperation.
Profit forecast: Taking into account the competitiveness and innovation of the company's products, we expect the company's revenue in 2024-2026 to be 2.28/ 28.3/ 3.38 billion yuan, up 28.5%/24.1%/19.4% year on year; net profit to mother will be 6.0/ 7.1/ 890 million yuan, up 27.3%/17.5%/25.9% year on year. First coverage, giving a “buy” rating.
Risk warning: raw materials rise, exchange rate fluctuations increase, performance forecasts and valuations fall short of expectations