Incident: Ganyuan Foods released its 2023 annual report and 2024 quarterly report. For the full year of 2023, it achieved operating income of 1,848 million yuan, +27.36% year over year; net profit to mother of 329 million yuan, +107.82% year over year; net profit after deducting non-return to mother was 292 million yuan, +96.76% year over year. 23Q4 achieved operating income of 534 million yuan, +10.85% year over year; net profit to mother was 115 million yuan, +66.99% year over year; net profit after deducting non-return to mother was 104 million yuan, +45.08% year over year.
24Q1 achieved operating income of 586 million yuan, +49.75% year over year; net profit to mother of 91 million yuan, +65.30% year over year; net profit without return to mother of 84 million yuan, +68.54% year over year. The performance was in line with market expectations.
Product marketing performance is good, and channel expansion continues to advance. Taking into account the impact of the Spring Festival misschedule, the 23Q4+24Q1 company achieved a total operating income of 1,120 million yuan, +28.29% year over year; net profit to mother was 206 million yuan, an increase of 66.24% year on year, and the company's performance was good. By product, green peas/melon kernels/broad beans/mixed nuts and beans/other series achieved revenue of 4.65/2.73/2.32/5.04/362 million yuan respectively, +26.04%/+11.02%/+32.16%/+43.29% compared with the same period last year. The old three maintained steady growth, and the overall performance of soybeans and nuts was outstanding. Among flavored nuts, wasabi summer fruit revenue has maintained a relatively rapid growth rate, and various new products have been launched. Freeze-dried fruit and nuts are in the cultivation stage, and terminal sales performance is good. By channel, distribution/e-commerce and other channel revenue in 2023 was 1,572/2.16/ 0.49 billion yuan respectively, +27.63%/+29.39%/+9.86% compared with the same period last year. In 24 years, the company continued to promote the supermarket channel layout. Among them, bulk packaging was rich in display categories, and the layout of empty counters was promoted; quantitative packaging further sorted out SKUs and selected key promotion products.
Expenses have been reduced, and profitability has increased year over year. In terms of gross margin, for the full year of 2023/23Q4/24Q1, the company's gross margin was 36.24%/36.04%/35.39%, respectively, 24Q1 -0.95pcts year-on-year, and -0.65pcts month-on-month. It is mainly due to the increase in e-commerce channel promotions and discounts during the Spring Festival. On the cost side, the sales expense rates for the full year of 2023/23Q4/24Q1 were 11.50%/11.09%/13.10%, respectively, 24Q1 -0.57pcts year over year, and +2.01pcts month-on-month. The effect of scale was evident mainly due to the increase in volume. Management expense rates for the full year of 2023/23Q4/24Q1 were 3.78%/3.20%/3.49%, respectively, 24Q1 -0.83 pcts year-on-year, and +0.28pcts month-on-month. Taken together, the company's net interest rate for the full year of 2023/23Q4/24Q1 was 17.81%/21.53%/15.58%, respectively. 24Q1 was +1.46pcts year-on-year, and -5.95pcts month-on-month. The scale effect was compounded by income tax rate adjustments, and the company's net interest rate level increased. Looking ahead to 2024, the company will actively promote the upstream direct procurement layout, which is expected to reduce the impact of fluctuations in raw materials through price locking and volume locking. The Anyang plant has achieved continuous optimization of profitability through increased production and operation efficiency, and is expected to further contribute to profits in 24 years.
Profit forecasting, valuation and rating: The company continues to promote the layout of new products, and the expansion of new channels is active and smooth. We basically maintained the 2024-2025 net profit forecast of 406/517 million yuan, and added the 2026 net profit forecast of 628 million yuan; the corresponding EPS for 2024-2026 was 4.36/5.55/ 6.74 yuan, and the corresponding P/E for the current stock price was 21/16/13 times, respectively, maintaining a “buy” rating.
Risk warning: raw material costs fluctuate; channel expansion falls short of expectations; food safety risks.