occurrences
The company achieved revenue of 1.41 billion yuan (+0.6% YoY), net profit of 240 million yuan (YoY +7.2%); 23Q4 revenue of 340 million yuan (YoY +0.2%), and net profit to mother of 50 million yuan (-27.3% YoY).
Key points of investment
The 23-year performance growth rate was faster than revenue. The increase in the price of dairy beverages decreased slightly, and revenue split in 23 years: (1) By product: dairy drinks/milk-flavored drinks/complex protein drinks/others, each achieved revenue of 13.8/0.1/0.1 billion yuan, +1.6%/-56.7%/-24.4%/-22.2% over the same period last year. Dairy beverages achieved revenue of 330 million yuan in Q4 in '23, +0.4% year-on-year. Looking at volume and price splitting, sales of dairy drinks decreased by 1.7% in '23, while unit prices also increased by 3.3%. (2) By region: East China, Central China, Southwest China, North China, South China, Northeast China, Northwest China, and e-commerce achieved revenue of 7.0/2.7/0.2/0.8/0.1/0.1/0.4 billion yuan, respectively, -3.6%/+5.1%/+3.5%/+10.9%/+22.0%/-34.3%/-6.2% compared with the same period last year. We believe that the slowdown in revenue side growth is mainly due to a weak recovery in demand and the diversion of some emerging channels. (3) Channel division: The distribution model/direct management model achieved revenue of 1,37/0.3 billion yuan respectively in 23 years, +0.6%/-4.4% year-on-year. The number of dealers in the company increased net by 35 in '23, with a net increase of 22/0/38/10 in the Central China/Southwest China/East China/South China markets respectively, reaching 614/428/903/200 respectively.
23Q4 revenue split: (1) By product: Dairy beverages achieved revenue of 330 million yuan in Q23, +0.4% year-on-year. (2) By region: East China, Central China, Southwest China, North China, North China, Northeast China, Northwest China, E-Commerce achieved 1.7/0.6/0.7/0.1/0.2/0.03/0.02/0.1 billion yuan in Q4, respectively, -0.8%/+5.9%/-6.3%/-68.8%/-72.2%/-83.0%/-78.1%/-76.2%.
23. The main reason for the increase in profitability throughout the year was price increase and raw material price reduction. The dividend was impressive, with a gross profit margin of 35.8% (+3.4pct year over year), net profit margin of 16.8% (+1.0pct year over year), sales expense ratio 11.9% (y-o-y -0.5pct); management expense ratio 4.7% (+0.5pct year over year); R&D expense ratio of 1.4% (+0.04pct year on year); financial expenses ratio -1.7% (+0.04pct year on year). The increase in profitability is mainly due to price increases and the decline in raw materials and energy prices.
23Q4 gross profit margin 34.2% (YoY -1.3 pct), net profit margin 14.0% (YoY -5.3pct), sales expense ratio 14.9% (YoY +4.2pct), management expense ratio 5.0% (YoY +0.3 pct); R&D expense ratio 1.6% (YoY +0.6pct); financial expenses ratio -2.5% (YoY -0.5pct). The increase in the sales expense ratio is mainly due to the increase in the company's investment in brand upgrading and promotion expenses.
The dividend rate for '23 is 80%, and the corresponding dividend rate for the '23 repurchase amount is 169%.
Profit Forecast and Valuation:
Revenue for 2024-2026 is estimated to be $16.7 billion, 19.8 billion, and 2.26 billion yuan, respectively, up 18.1%, 18.7%, and 14.4%; net profit to mother will be $2.7, 320, and 370 million yuan, respectively, up 13.8%, 18.5%, and 15.5%; maintaining the purchase rating.
Risk warning:
Fluctuating raw material prices; food safety; increased industry competition risk