Key points of investment
The company's performance continued to increase in 23 years. In 24Q1, driven by new products such as 500ml gold bottles and hydrating, revenue growth exceeded market expectations. The company has proven the potential of its platform-based company through the success of replenishing water. In the future, with intensive channel cultivation and nationwide layout, the performance is expected to continue to improve.
Excellent results in 2023, 24Q1 revenue exceeding market expectations
The company achieved revenue of 11.263 billion yuan in 2023, up 32.42% year on year; realized net profit of 2.040 billion yuan, up 41.60% year on year; of these, 23Q4 achieved revenue of 2,622 billion yuan, an increase of 40.88%; realized net profit to mother was 384 million yuan, an increase of 39.69% year on year, and performance continued to grow rapidly.
2024Q1's revenue exceeded market expectations, reaching 3.482 billion yuan, an increase of 39.8%; realized net profit to mother of 664 million yuan, an increase of 33.51%
The share of non-energy drink revenue increased in 23, and the 24Q1 Dongpeng Special Drink's revenue slightly exceeded expectations of 10.336 billion yuan in 2023, an increase of 26.48% over the previous year, accounting for 92%. Due to the continuous growth of products such as hydrating, the share increased to 5.11%, which contributed to the increase in the company's share of revenue from 3.76% in 22 to 8.13%.
Dongpeng Special Drink of 24Q1 achieved revenue of 3.101 billion yuan, an increase of 30.11% over the previous year; the share of other beverages increased rapidly, from 4.24% in 23Q1 to 10.84% in 24Q1. Among them, Dongpeng Hydration and Da Ga together accounted for 6.92%, and the company's new product expansion was smooth.
In addition to the main region of intensive cultivation in Guangdong, continuing to develop the national market, the company still had the highest share of the Guangdong region in 2023, and continued to implement an omni-channel intensive farming strategy, focusing on investing resources in weak regions. In '23, it achieved 3,761 billion yuan, an increase of 12.14%, accounting for 33.44%. The revenue growth rate of North China, East China, and Southwest China is relatively fast in the national region, with growth rates of 65%, 48%, and 65% respectively. Nationalization has had good results.
24Q1's sales of new products such as 500ml gold bottles and hydrating products continued to increase. Guangdong's regional revenue increased 9.45% year over year, accounting for 26.49%; the national region achieved a 51% increase, accounting for 62%.
Strengthen terminal network development and optimize terminal display
In 2023, the number of the company's cooperative dealers increased to 2,981. 100% of the cooperative dealers covered prefecture-level cities, and the number of active outlets increased to 3.4 million, an increase of 13.4% over the previous year. The number of dealers in the 24Q1 company was 2,912. Distribution channel revenue accounted for 88%, direct channel revenue was 10%, and online channel revenue accounted for about 2%. The company continues to strengthen the development of terminal outlets, insist on maximizing the display of freezers and terminals with high potential energy, and strengthen the construction of channel systems.
In 24Q1, due to changes in product structure, gross margin declined slightly, and the company's gross margin in 2023 was 43.07%, up 0.75pct year on year; net profit margin was 18.11%, up 1.17pct year on year. 24Q1 believes that since new products are still being developed and the gross margin is low, and the share increased in the first quarter, resulting in a slight decrease of 42.77%, a year-on-year decline of 0.76pct;
24Q1 The company's sales/management/R&D/finance expense ratios were +1.43pct/-0.30pct/-0.10pct/-1.06pct, respectively. Among them, the slight increase in sales expenses is mainly due to the upcoming peak season for the company and increasing freezer sales.
The company's net interest rate declined slightly in 24Q1 to 19.07%, down 0.9 pct.
Continue to be optimistic about the company's long-term development and maintain a buying rating
The company continues to deepen channel cultivation and nationwide layout, and Dongpeng Specialty Drinks continues to maintain steady and rapid growth; at the same time, the second growth curve is still growing, and its success has proven the potential of the company's platform-based company, and it is expected to build a diversified product matrix in the future. We expect the company's revenue for 2024-2026 to be 144.03/178.27/21.932 billion yuan, respectively, with year-on-year increases of 27.88%, 23.78%, and 23.03%; realized net profit to mother will be 26.69/33.56/4.179 billion yuan, respectively, with year-on-year increases of 30.85%, 25.75% and 24.52%, respectively. Corresponding PE is 29.22/23.24/18.66 times, respectively, maintaining the purchase rating.
Risk warning: Channel expansion falls short of expectations, new product release falls short of expectations, packaging price increases, etc.