4Q23 收入增长提速，2023 年全年收入突破43 亿元。1）葡萄酒：2023 年收入31.39 亿元，其中销量和吨价分别同比+0.21%和+10.25%，我们认为销量承压与下游消费市场需求相对疲软，并且国产红酒受到白酒及进口酒挤压有关，均价提升主要与产品结构变化有关，我们预计葡萄酒中50 元及以内的低端干红葡萄酒占比进一步下降，100-300 元的解百纳占比提高。2）白兰地：2023 年收入11.53 亿元（同比+16.35%），其中销量和吨价分别同比+8.80%和+6.94%。3）截至2023 年末，公司合同负债1.75 亿元，环比3Q23 增加277.34 万元，高于2022 年末的1.66 亿元。2023 results exceed market expectations
Revenue in 2023 was $4.385 billion, +11.9% YoY; net profit to mother was $532 million, +24.20% YoY. We expect 4Q23's performance to be better than market expectations due to the improved results of 4Q23 company's increased channel investment, significant revenue growth, and improved cost investment efficiency.
Development trends
Revenue growth accelerated in 4Q23, with revenue exceeding 4.3 billion yuan for the full year of 2023. 1) Wine: Revenue of $3.139 billion in 2023, of which sales volume and tonnage price were +0.21% and +10.25%, respectively. We believe that sales pressure is related to relatively weak demand in the downstream consumer market, and that domestic red wine is being squeezed by liquor and imported wine. The increase in average price is mainly related to changes in product structure. We expect the share of low-end dry red wine within 50 yuan of wine to increase further, and the share of 100 to 300 yuan per cent increase. 2) Brandy: Revenue of 1,153 billion yuan in 2023 (+16.35% YoY), with sales volume and tonnage price +8.80% and +6.94%, respectively. 3) As of the end of 2023, the company's contractual liabilities were 175 million yuan, an increase of 2.7734 million yuan over 3Q23, up from 166 million yuan at the end of 2022.
2023 gross margin +2.2ppt year over year, net profit margin to mother +1.3ppt yoy. 1) The gross profit margin in 2023 was 59.2%, +2.2ppt year on year. Of these, 4Q23 was +3.4ppt year on year, and the gross margin of the company's wine/brandy products increased by 2.48/1.07ppt respectively in 2023. We expect to mainly benefit from product structure optimization and an increase in the proportion of high-end products. 2) The sales expense ratio in 2023 was 28.27%, +2.02ppt, of which marketing expenses increased 52% year over year to 490 million yuan.
Looking ahead to 2024: The company will continue to deepen business division reforms and increase promotion in key markets. 1) Industry: According to the Ministry of Commerce, from March 29, 2024, China stopped imposing anti-dumping duties on imported wine originating in Australia1. We believe that the policy adjustment will increase its influence on the overall red wine market, but it will also intensify competition. We need to further observe the recovery in demand and competition between domestic and imported brands in the future. 2) Company: In 2024, the company announced a revenue target of not less than 4.7 billion yuan. It will adhere to a high-end strategy, continue to promote division reform and channel cultivation, and explore banquet scenarios, etc.
Profit forecasting and valuation
Considering that the product structure will continue to be optimized in 2024 and the profit situation is expected to improve, we raised our 24-year profit by 8.5% to 577 million yuan, and introduced a new 25-year profit of 602 million yuan. The current A share price corresponds to 31.1/29.8 times the 24/25 P/E. Considering the adjustment of profit forecasts but the relative correction in sector valuations, we maintained a target price of 27.6 yuan for A shares, which corresponds to about 33.3/31.7 times the 24/25 P/E. There is about 6.4% room to rise compared to the current stock price, maintaining a neutral rating. The target price for B shares was maintained at HK$13, corresponding to 13.9/12.8x P/E in 24/25. The current price of B shares corresponds to 10.6/9.7xP/E in 24/25, with 31.4% upward room, maintaining the outperforming industry rating.
risks
Demand recovery fell short of expectations, and competition intensified.
