The company's revenue for 2023 increased 1.24% year on year, achieving net profit of 0.19 million yuan. On April 16, the company announced its 2023 annual report: in 2023, it achieved operating income of 7.06 billion yuan, up 1.24% year on year, and realized net profit of 0.19 billion yuan (-155 million yuan in the same period of the previous year, turning a loss into a profit), converted into a fully diluted EPS of 0.12 yuan, achieving net profit without deduction of 0.1 million yuan.
Looking at the single-quarter split, 4Q2023 achieved operating income of 1,536 billion yuan, an increase of 4.38% over the previous year, and achieved net profit of 0.2 billion yuan (-101 million yuan in the same period last year, turning a loss into a profit), which translates into a fully diluted EPS of 0.01 yuan, achieving net profit without deduction of -01 million yuan.
The company's comprehensive gross margin decreased by 2.13 percentage points in 2023, and the cost ratio decreased by 7.42 percentage points during the period. The company's comprehensive gross margin in 2023 was 38.63%, down 2.13 percentage points from the previous year. Looking at the single-quarter split, the 4Q2023 company's comprehensive gross margin was 25.12%, down 24.23 percentage points from the previous year.
The company's expense ratio for the 2023 period was 31.83%, a year-on-year decrease of 7.42 percentage points. Among them, the sales/management/finance expenses ratio was 10.75%/14.80%/6.28%, respectively, with a year-on-year change of +2.58/ -9.55/ -0.45 percentage points, respectively. The 4Q2023 company's expense ratio for the period was 16.21%, down 32.59 percentage points from the previous year. Among them, the sales/management/finance expense ratios were 20.90%/-11.62%/6.94%, respectively, with year-on-year changes of +11.06/ -42.93/ -0.71 percentage points, respectively. Among them, negative management expenses were due to cost recovery.
Promote the “South-to-North Transportation” strategy and further strengthen cost management
The company added 6 new stores in 2023. By the end of 2023, the company had a total of 146 stores. In terms of the supply chain, the company has accelerated the implementation of the “South-to-North Transportation” strategy, strengthened procurement and marketing of agricultural products characteristic of Hainan, and expanded the scope of direct sales of household appliances. In terms of cost control, all departments of the company have established supervisory systems in areas such as budget, investment, and settlement to increase material recycling efforts. On the online side, the company expanded businesses such as online shopping, home delivery, and live streaming. In 2023, the Eurasia Group Mini Program was viewed more than one million times a day, adding 690,000 new members.
Raise profit forecasts and maintain “buy” ratings
The company's profit performance was higher than our previous expectations, mainly due to the company's good cost control effect and the expense ratio declined sharply during the period. We believe that there is still some room for improvement in the company's future profitability, raised the company's 2024/2025 EPS forecast by 9%/10% to 0.14/0.15 yuan, and added 0.16 yuan for the company's 2026 EPS forecast. The company has a strong brand effect in Changchun and other places. The supply chain is continuously improved, offline and offline integration is continuously strengthened, and the “buy” rating is maintained.
Risk warning: Regional economic growth falls short of expectations, and the operating conditions of major stores in Eurasia have fallen short of expectations.