On April 25, the company released its report for the first quarter of 2024. According to the report, in the first quarter of 2024, the company achieved operating income of 1,108 billion yuan (YoY +7.05%), achieved net profit of 121 million yuan (YoY +39.37%), and realized net profit of 104 million yuan (YoY +45.79%) after deducting net income from mother.

Investment highlights:

The company's performance grew steadily, and net profit maintained a high growth rate. 2024Q1 achieved revenue of 1.08 billion yuan (+7.05% YoY) and net profit of 121 million yuan (YoY +39.37%). The growth rate was higher than the same period last year (+22.15%); net profit without return to mother was 104 million yuan (YoY +45.79%), which was a significant increase over the same period last year (+21.29%).

Both gross margin and net margin increased, and sales expenses increased slightly in the period expenses. The 2024Q1 company's gross margin was 42.13%, +1.34pcts year on year; the net margin of the 2024Q1 company was 11.37%, +2.50pcts year over year. 2024Q1 Company Sales Expense Rate/Management Expense Rate/R&D Expense Rate/Financial Expense Ratio were 16.62%/8.03%/3.05%/-3.57%, +1.26pcts/ -0.39pct/-0.34pct/-0.06pct.

Volume and price have risen sharply, with the tonnage price increasing even more. In the first quarter of 2024, the tonnage price of the company's beer was 4,200.15 yuan/ton, up 6.24% year on year; the company achieved sales of 263,800 tons of beer, an increase of 0.77% year on year; among them, sales of high-end beer products increased 15.05% year on year.

Profit forecast and investment advice: Currently, the company continues to be high-end. It is expected to maintain steady growth by releasing profits from high-end products, and the decline in raw material costs in 2024 is expected to increase the company's profitability. We maintain our previous forecast. The company's net profit for 2024-2026 is expected to be 715/791/863 million yuan, up 14.59%/10.74%/9.11% year on year, corresponding EPS of 0.32/0.36/0.39 yuan/share, and the closing price on April 24 corresponding to PE is 25/23/21 times, maintaining the “gain” rating.

Risk factors: risk of market changes, risk of raw material supply and price fluctuations, industry competition risk, food safety risk.