The company's 1Q2024 revenue increased 5.73% year on year, and net profit to mother increased 7.10% year on April 19. On April 19, the company announced its 2023 annual report: achieved operating income of 17.763 billion yuan in 2023, a year-on-year decrease of 2.31%, and realized net profit to mother of 136 million yuan, an increase of 127.04% year on year, and realized net profit without deduction of 99 million yuan, an increase of 275.56% year on year.
1Q2024 achieved operating income of 5.189 billion yuan, an increase of 5.73% over the previous year, and realized net profit of 147 million yuan, converted to fully diluted EPS of 0.23 yuan, an increase of 7.10% over the previous year, and realized net profit without deduction of 136 million yuan, an increase of 1.05% over the previous year.
The company's comprehensive gross margin for 1Q2024 decreased by 0.62 percentage points, and the cost ratio for the period decreased by 0.44 percentage points. The company's comprehensive gross margin in 2023 was 23.88%, up 0.62 percentage points from the previous year. 1Q2024's consolidated gross margin was 24.04%, down 0.62 percentage points year over year.
The company's expense ratio for the 2023 period was 22.40%, up 0.15 percentage points year on year. Among them, sales/management/finance/R&D expenses were 18.85%/2.12%/1.36%/0.07%, respectively, with a year-on-year change of +0.19/+0.07/-0.20/+0.07 percentage points, respectively. The 1Q2024 company's expense ratio for the period was 20.08%, down 0.44 percentage points year on year. Among them, sales/management/finance/R&D expenses were 16.92%/1.86%/1.24%/0.06%, respectively, with year-on-year changes of -0.18/-0.10/-0.12/-0.03 percentage points, respectively.
The retail and discount store business is progressing smoothly. The degree of online distribution continues to increase, and the company opened 110 new stores in 2023, including 37 supermarkets, 56 snack stores, 7 Haohuixing discount stores, and 10 other business formats. By the end of 2023, the company had a total of 1,049 stores, including 259 comprehensive supermarkets, 408 community fresh food supermarkets, 228 rural supermarkets, 53 snack stores, 7 Haohuixing discount stores, and 94 convenience stores. On the online side, online sales increased by 23.9% year-on-year in 2023, driving 3.06 million offline visitors, and the in-store conversion rate reached 35%.
At the same time, the logistics “scheduled delivery” project was launched, and the on-time rate of delivery vehicles arriving at stores reached more than 80% in 2023.
Lower profit forecasts and maintain the “increase in holdings” rating
The company's performance fell short of our previous expectations, mainly due to the company's launch of a new snack and discount store business format and relatively large investment. Given that the company will continue to invest in the future and the competition in the above business formats is fierce, we lowered our 2024/2025 net profit forecast of 44%/45% to 1.24/137 million yuan, and added a forecast of 148 million yuan for the company's net profit to the mother in 2026. The company has a strong competitive position in Shandong and other places. The new business format of snack shops and discount stores is conducive to increasing the company's market share and maintaining the “gain” rating.
Risk warning: The business area is concentrated, rising rents have led to increased costs, and the development of new business formats falls short of expectations.