23Q4 revenue was +13.5% YoY. The company achieved revenue of 6.872 billion yuan in '23, +9.14% year on year, net profit to mother of 480 million yuan, +10.53% year on year, net profit without return to mother of 367 million yuan, -1.25% year on year.
Among them, Q4 revenue was 1.702 billion yuan, +13.5% year on year, net profit to mother was 81 million yuan, -16.35% year on year, and net profit after deducting non-return to mother was 41 million yuan, or -42.66% year on year. Net operating cash flow in '23 was 588 million yuan, -180.08% year-on-year, mainly due to a year-on-year increase in raw material purchases and a year-on-year increase of 1,613 billion yuan in cash payments for goods and services. It is planned to distribute a cash dividend of 1.3 yuan (tax included) for every 10 shares to all shareholders in '23.
23Q4 gross margin year-on-year -5.26pct. The company's 23-year gross profit margin was 11.61%, year-on-year -2.33pcts, sales expense ratio 0.89%, year-on-year -0.05pcts, management expense ratio 3.67%, -1.45pcts yoy, financial expense ratio 0.69%, +0.33pct yoy, net profit margin 6.98%, year-on-year +0.09pcts. Among them, the Q4 gross profit margin was 9.75%, -5.26 pcts year on year, sales expense ratio 0.89%, -0.21pcts year on year, management expense ratio 4.42%, -1 pct year on year, net interest rate 4.78% year on year, and -1.71 pcts year on year.
Revenue from natural colors/spices/nutritional and medicinal products was +8.88% year-on-year in '23. By product, revenue from natural colors/spices/nutritional and medicinal products in 23 years was 2.89 billion yuan, +8.88% year on year, gross profit margin 19.93%, year-on-year -5.4 pct; cottonseed business revenue was 3,548 billion yuan, +5.14% year on year, gross profit margin 3.66%, -1 pct year on year; other business revenue was 433 million yuan, 62.5% year on year. Looking at the subregions, mainland China's revenue in '23 was 5.592 billion yuan, or 9.37%, gross profit margin was 10.26%, -1.13pct year on year; revenue outside mainland China was 1,279 billion yuan, 8.18% year on year, gross profit margin 17.51%, or 7.44pct year on year.
The main products have been developing steadily for 23 years. Sales of red chili peppers exceeded 10,000 tons in '23; sales of lycopene and curcumin increased significantly, with annual sales of 1,130 tons, up 17% year on year; lutein products stabilized and adjusted the sales structure and pace reasonably, with sales volume of food-grade lutein sold more than 70 million grams, an increase of about 30% year on year; silymarin sales continued to grow at a high rate, doubling for four consecutive years; sales of lycopene and curcumin products were strengthened through concessionary management. Sales revenue for spice products reached a record high. Sales of the core product peppercorns oleoresin increased by more than 50% year-on-year, and revenue exceeded 120 million yuan. The health food business is developing well, with revenue exceeding 150 million yuan, an increase of about 80% over the previous year; the successful filing of traditional Chinese medicine formula granules has saved new momentum for the development of the proprietary Chinese medicine business.
Profit forecasting and valuation. We expect the company's 24-26 EPS to be 0.72/1.01/1.18 yuan respectively, which is 16-27 times the company's 24-year PE, giving the company 16-20 times PE in 24 years, corresponding to a reasonable value range of 11.52-14.4 yuan, giving it a “superior to the market” rating.
Risk warning. The impact of price fluctuations in upstream raw materials, increased competition in the industry, etc.