Incident: The company released its 2023 annual report and 2024 quarterly report. In 23, it achieved revenue of 1,848 million yuan, +27.36% year over year; net profit to mother of 329 million yuan, +107.82% year over year; deducted non-net profit of 292 million yuan, +96.76% year over year. Looking at a single quarter, 23Q4 achieved revenue of 534 million yuan, +10.85% year over year; net profit to mother of 115 million yuan, +66.99% year over year; deducted non-net profit of 104 million yuan, +45.08% year over year.
24Q1 achieved revenue of 586 million yuan, +49.75% year over year; net profit to mother of 91 million yuan, +65.30% year over year; deducted non-net profit of 84 million yuan, +68.54% year over year.
Omnichannel and multiple categories continue to expand, and the revenue side is growing rapidly. By product: The company continues to optimize the product structure, accelerate research and development of new products, and gradually form a multi-category development strategy. The revenue of comprehensive nuts and beans/green peas/melon kernels/ broad beans/ other series was 5.0 billion yuan in 23 years, respectively, +32.2%/+26.0%/+18.4%/+11.0%/+43.3%. The old three have grown steadily, and expanded products have been rapidly launched in mass sales channels. Channel division: Revenue from distribution/e-commerce and other models in 23 years was 15.7/2.2/50 billion yuan respectively, +27.6%/+29.4%/+9.9%. Under the omnichannel development strategy, we continued to deepen system cooperation with snack stores, supermarket member stores, etc., continue to deepen traditional supermarket systems, and vigorously develop new business formats such as online e-commerce short videos, live broadcasts, and online dealer cooperation.
23 years of cost improvements, scale effects, reduced income tax rates, and optimization of profitability. 23Q4 achieved a gross profit margin of 36.04%, +1.14pcts year over year; 23 was +1.98pcts year over year, mainly due to falling raw material prices, the average purchase price of macadamia nuts/palm oil was -31.6%/-23.6% year over year; 24Q1 gross margin was 0.95pcts year over year. Apart from the impact of New Year's Day promotions, palm oil prices fluctuated in the beginning of the year 24, and the company adopted measures such as price locking to mitigate cost fluctuations. In terms of expenses, 23Q4 sales/management/ R&D/ finance cost rates were 11.09%/3.20%/1.22%/-0.76%, respectively, -1.94/+0.36/+1.82/-0.30pcts year-on-year. Due to the scale effect and the decline in income tax rates, 23Q4 achieved a deduction of 19.54% of non-net interest rate; +4.61 pcts year on year; 24Q1 achieved a deduction of 14.25% of non-net interest rate, +1.59 pcts year on year, and profitability continued to be optimized.
The product channel continues to improve, and the growth potential continues. In 24, the company will conduct business around the three major constructions of channel power, product power, and operation power. The channel will further increase the network coverage of traditional channels such as KA, BC, and CVS, stabilize and expand emerging channels such as snack sales, e-commerce platforms, social e-commerce, and live streaming, and actively explore multi-channel development models; strengthen and upgrade the old three models in the product, refine core products, quickly follow up and add superior categories, and keep up with channel demand; establish a talent hierarchy to strengthen cost control, warehousing and logistics capabilities, and cost control capabilities. Effectiveness to improve operational efficiency.
Investment advice: We expect the company's revenue for 2024-2026 to be 23.7/2.6/3.56 billion yuan, respectively, +28.1%/25.2%/20.3%; net profit to mother will be 4.2/5.2/63 billion yuan, respectively, +27%/24.7%/20.4%. The P/E corresponding to the current stock price is 19/15/13x, respectively, maintaining the “recommended” rating.
Risk warning: Channel expansion falls short of expectations, new product releases fall short of expectations, fluctuating raw material prices, food safety risks.