Core views

In 2023, the company achieved operating income of 5.49 billion yuan, +26.11% year on year; realized net profit of 449 million yuan, +121.91% year on year; realized net profit without deduction of 312 million yuan, +141.77% year on year. With 2023Q4, the company achieved operating income of 1,439 million yuan, -2.91% year on year; realized net profit of 157 million yuan, +112.38% year over year; realized net profit of 56 million yuan after deduction, +44.73% year over year. The company's revenue and profit increased dramatically in 2023, mainly due to rent reduction in the same period last year. At the same time, fresh agricultural and sideline products have immediate demand attributes, and agricultural market transactions are active.

occurrences

In 2023, the company achieved operating income of 5.49 billion yuan, +26.11% year on year; realized net profit of 449 million yuan, +121.91% year on year; realized net profit without deduction of 312 million yuan, +141.77% year on year.

With 2023Q4, the company achieved operating income of 1,439 million yuan, -2.91% year on year; realized net profit of 157 million yuan, +112.38% year over year; realized net profit of 56 million yuan after deduction, +44.73% year over year.

Brief review

The agricultural products wholesale market business continues to be consolidated, and the industrial chain business grew rapidly, and the company's revenue and profit increased dramatically in 2023, mainly due to the reduction in rent relief. At the same time, fresh agricultural and sideline products have immediate demand attributes, and agricultural market transactions are still active. By business,

1. The agricultural products wholesale market business expanded steadily, and revenue increased 16.42% year-on-year to 3.221 billion yuan, accounting for 58.66% of revenue. (1) The company continues to promote market construction. In 2023, the company invested 500 million yuan to establish Sichuan Haijixing Smart Supply Chain Technology Co., Ltd., and obtained land for the first phase of the Chengdu Xinjin Project to accelerate the construction of the second phase of Tianjin, Changsha, and Guangxi Haijixing, continue to strengthen the layout across the country, and promote trial operation of the first phase of **** Haijixing. (2) Increase the variety of transactions and expand the volume of transactions. Tianjin Haijixing built the “North Trade Center for Imported Fruits from ASEAN”. The Shanghai market established a meat and fishery product collection and distribution center, vegetable city distribution area, and overseas fruit delivery center. Huizhou Haijixing put into operation the “East Guangdong Prepared Food Trading Center” and the “East Guangdong Base Food Trading Center”. The Futian Market launched a trial operation of the “Futian Nongbi” online mall, and the Chengdu market introduced Western and Japanese food preparation categories.

2. The market support business grew rapidly by 35.60% to 2,257 billion yuan, accounting for 41.12% of revenue, which further increased. Upstream side: The company continues to explore the layout of the entire industry chain, extend to the planting side of the base, and establish agreements and partnerships with about 400,000 mu of bases across the country.

Downstream side: Explore and cultivate high-quality items and specialty varieties such as pickled oranges; promote standardization and scale of urban food distribution business; and develop landmark agricultural and sideline products.

In addition to the cost increase brought about by one-time market expansion, the company's overall rate declined year over year. The company expanded in the Changsha market, one-time market development expenses increased, and the company's sales rate increased by 1.73 pct year-on-year. The company's management rate, R&D rate, and financial rate decreased by 0.97 pct, 0.14 pct, and 1.66 pct, respectively, month-on-month.

The company continues to increase its dividend rate. In 2023, the company plans to distribute a cash dividend of 1.10 yuan for every 10 shares to all shareholders, with a total dividend of 187 million yuan. The dividend rate will reach 41.58%, and the 2022 dividend rate will be 34%.

Investment advice: We expect the company's net profit to be 4.86, 5.12, and 552 million yuan from 2024 to 2026, respectively, corresponding to 20, 19, and 18 times PE, giving it an “increase in wealth” rating.

Risk analysis

1. Competition in the industry heightens the risk. Companies such as Xinfadi, Wanbang International, and China Agricultural Products Trading are also expanding their industrial chains and expanding the coverage of the agricultural market, and market competition is likely to intensify.

2. The development of supporting services in the market fell short of expectations. Currently, holding companies related to some of the company's market support services are still in a state of loss, and some companies are undergoing business adjustments and upgrades. If business development does not meet expectations, it may not be possible to turn a loss into a profit, which will affect the company's performance.

3. The risk of regional concentration of operations. Currently, more than 70% of the company's revenue comes from Guangdong and Guangxi. If there are major adverse changes in the economic environment, residents' income, etc. in South China, or if competition in the regional agricultural market intensifies, it will adversely affect the company's operations.