Description of the event
The company released its 2023 annual report. In 2023, the company achieved total revenue of 14.815 billion yuan, +5.53% year-on-year; net profit to mother was 1,337 billion yuan, +5.78% year-on-year. Among them, 23Q4 achieved total operating income of 1,786 billion yuan, -3.76% year-on-year; net profit to mother of -0.07 billion yuan, a profit of 81 million yuan for the same period last year, turning a year-on-year loss.
Incident reviews
Volume increases help increase performance, and the product structure is under pressure in the short term. In terms of total sales, in 2023, the company achieved sales volume of 2.9975 million kiloliters of beer, +4.93% year on year; of these, 22Q4 achieved sales of 345,800 kiloliters of beer, +4.76% year on year. By product, high-end, mainstream and economic products achieved revenue of 88.55/ 52.97/290 million yuan respectively in 2023, +5.18%/+5.64%/+10.06% year-on-year. Among them, Leborg achieved a sharp rise in volume and price, and the Chongqing brand achieved high-single-digit growth. In terms of tonnage, the company's beer tonnage price in 2023 was 4,942 yuan/ton, +0.57% year-on-year. Looking at the whole year as a whole, sales growth helped increase performance, and the high-end process has slowed down. Looking at the subregion, the company achieved revenue of 40.23/60.84/4.334 billion yuan in the Northwest District/ Central District/ Southern Region respectively in '23, +1.10%/+3.01%/+13.74%. The southern region grasped the recovery of tourism in some provinces and achieved good growth. Looking ahead to the next 24 years, the company will respond positively to the external market environment, and the implementation of major city plans is more refined. With the gradual recovery of subsequent demand, the company's large single product potential is expected to recover, helping its performance grow.
The fee rate remained stable in '23, and profits are expected to gradually improve in '24. In 2023, the company's gross margin was 49.15%, -1.33pct year on year, the sales expense ratio and management expense ratio were +0.53/-0.47pct year on year, respectively, and the net interest rate to mother was 9.02%, +0.02pct year on year. Gross margin declined slightly in '23 due to rising raw material prices. Profitability remained relatively stable throughout the year as the company actively controlled expenses and increased efficiency. We expect barley prices to gradually decline in '24, and the company's profit flexibility is expected to gradually unleash.
Firmly push forward the big city plan, and there is still plenty of room for growth in the medium to long term. The company will continue to actively promote the big city plan in '24, and its channel execution and level of deep cultivation are expected to gradually increase. The company's product matrix continues to improve, and we expect the company to achieve good growth in traditional large single products such as Usu, as well as products such as Leburg and Heavy Beer.
Investment advice
The company's product structure is improving. With channel adjustments gradually being put in place, there is plenty of room for brand development. In the medium to long term, we are optimistic about the company's development during the transition period in the beer industry. The company's profit forecast:
The company's revenue for 2024-2026 was 156.75/165.39/17.566 billion yuan respectively, up 5.8%/5.5%/6.2% year-on-year. Net profit attributable to mother was $1,443/15.72/1,733 billion, respectively, up 7.9%/9.0%/10.2% year-on-year. The corresponding EPS was 2.98/3.25/3.58 yuan, respectively, and the closing price on April 1 was 22/20/18 times PE, respectively, maintaining the company's “buy-B” investment rating.
Risk warning
Product upgrades fell short of expectations, industry competition intensified, raw material prices rose more than expected, etc.