Incident: In 2023, the company achieved revenue of 14.815 billion yuan, an increase of 5.53% year on year; achieved net profit of 1,337 billion yuan, an increase of 5.78% year on year; realized net profit after deduction of 1,314 billion yuan, an increase of 6.45% year on year. Among them, 2023Q4 achieved revenue of 1,786 billion yuan, a year-on-year increase of -3.76%; realized net profit attributable to mother of 0.07 billion yuan; realized net profit after deduction of -0.13 billion yuan; and 2022Q4 was 73 million yuan.
The average price of 2023Q4 is under pressure, and gross margin has declined due to rising compounding costs. In 2023, the company achieved sales volume of 2.9975 million kiloliters of beer, an increase of 4.93% over the previous year; the revenue per ton of wine was 4,818 yuan/kilolitre, an increase of 0.49% over the previous year. In terms of grade, high-end, mainstream, and economical beers achieved revenue of 88.55, 52.97, and 290 million yuan respectively in 2023, with year-on-year increases of 5.18%, 5.64%, and 10.06%, respectively. By region, the northwest region, central region, and southern region achieved revenue of 40.23, 60.84, and 4.334 billion yuan respectively in 2023, with year-on-year increases of 1.10%, 3.01%, and 13.74%, respectively. In 2023, the company's cost per ton of alcohol rose 3.27% year on year, and gross margin fell 1.33 pct year over year to 49.15%. 2023Q4 achieved sales of 345,800 kiloliters of beer, an increase of 4.76% over the previous year; however, as the company's sales and other investments returned to normal, the fourth quarter's tonne revenue increased -9.31% year-on-year to 4,859 yuan/kilolitre. The cost of 2023Q4's tonne of alcohol increased 5.92% year over year, and gross margin decreased by 6.79 pcts year on year to 48.79%.
Expenses rose in the fourth quarter, and market investment returned to normal. In 2023, the company's sales, management, R&D, and finance expense ratios were +0.53, -0.47, -0.61, and -0.01 pcts year-on-year, respectively, to 17.10%, 3.34%, 0.18%, and -0.41%, respectively. The overall cost ratio remained stable. 2023Q4's sales, management, R&D, and financial expense ratios were +4.88, +0.45, -0.55, and +0.23 pcts year-on-year, respectively, to 33.10%, 7.10%, 0.72%, and -0.75%, respectively. The increase in sales expenses was mainly due to increased market investment. Taken together, in 2023, the company's net interest rate after deduction increased 0.08 pcts to 8.87% year on year, and 2023Q4 net interest rate after deducting non-return mother increased by -4.67 pcts year on year to -0.73% year on year.
Profit forecast: The company achieved mid-single-digit sales growth in 2023. However, due to weak demand, the structure is still under pressure. Average price increases slowly, while cost-side pressure has led to a year-on-year decline in gross margin. The company actively stabilizes its profitability performance through fee control. Looking ahead to 2024, benefiting from falling prices of bulk raw materials, it is expected that the pressure on the cost of tonnes of wine will decrease, driving the release of profit flexibility. According to the company's annual report, we adjusted the profit forecast. The company's revenue for 2024-2026 is 156.13, 163.87, and 17.150 billion yuan respectively (originally 2024-2025 was 156.39 and 164.06), net profit to mother is 1,441, 15.66, and 1,668 billion yuan (originally 14.93 and 16.21 for 2024-2025), EPS is 2.98, 3.24, and 3.45 yuan, respectively, corresponding PE is 21.7 times, 19.9 times, 18.7 times, maintaining a “buy” rating.
Risk warning: repeated global epidemics and a slowdown in global economic growth; food safety risks; declining sales due to factors of force majeure; worsening market competition leading to promotional activities exceeding expectations; risk of untimely updates of research information