The company achieved revenue of 31.93 billion yuan in 2008, +21.8% year on year, net profit of 10.44 billion yuan, +28.9% year on year, 24Q1 revenue of 15.34 billion yuan, +20.9% year on year, net profit to mother of 6.26 billion yuan, +30.0% year over year. Revenue was in line with expectations, profit exceeded previous expectations, cash flow performance was good, and advance payments were abundant. The outstanding performance of the 2023 Youth 20/25 led to a 46% share of blue and white in 2023, and the cost rate continued to decrease due to the scale effect. The high increase in blue and white in 24Q1 led to an increase in gross profit, and costs declined steadily and slightly. The core market south of the Yangtze River was +30%, and the market structure of “a red sun, five stars, and a fragrant world” was gradually formed. The goal for 24 years is to achieve steady progress of 20% growth. It successfully surpassed 30 billion in 23, and is expected to maintain rapid and high-quality growth in 24. EPS was slightly raised to 10.87, 13.57, and 16.20 yuan in 24-26, corresponding to 23X in 24. The target price is 293 yuan, maintaining the “Highly Recommended” investment rating.
23 years of overcompleting tasks came to a successful conclusion, and 24Q1 profit slightly exceeded expectations, and cash flow was good. The company released an annual report and quarterly report. In '23, the company achieved revenue of 31.93 billion yuan, +21.8% year-on-year, and net profit of 10.44 billion yuan, +28.9% year-on-year. In '23, the company made great strides to promote nationalization and exceeded its annual tasks. Among them, the 23Q4 single quarter revenue was 5.18 billion yuan, +27.4% year on year, and net profit to mother was 1.01 billion yuan, +2.0% year over year. The company's 24Q1 revenue was 15.34 billion yuan, +20.9% year on year, and net profit to mother was 6.26 billion yuan, +30.0% year over year. Revenue was in line with expectations, and profit exceeded previous expectations. Cash flow from 24Q1 sales was $14.2 billion, +44.6% year over year, contract debt at the end of Q1 was 5.59 billion, up 34% year on year. Cash flow performance was good and advance payments were abundant. Under the high base of 24Q1, it still had a good start, and Fenjiu's revival is still strong. The advantages of the full-price product system are obvious.
The outstanding performance of Blue 20/25 led Blue and White to 46% in 2023, and the cost rate continued to decrease due to the scale effect.
In 23 years, the company actively consolidated the foundation and adjusted the product structure. The gross margin for 23 years was 75.31%, -0.05pct year on year. The annual revenue of medium- and high-priced alcohol/other alcoholic beverages was 23.20 billion/8.54 billion, +22.6%/20.2% compared to the same period. The blue and white series accounted for 46% of total revenue. The growth rate of Qing20/25 is expected to exceed the overall growth rate. Lao Baifen Panama maintained the company's average growth rate, Bofen grew in double digits, and the revival version grew in single digits. The sales expense ratio was 10.1%, -2.9 pct year on year. The absolute amount of sales expenses decreased, mainly due to advertising and business promotion expenses of 1.97 billion yuan in '23, -11% compared to the same period. The company strengthened cost efficiency and compliance control, reduced some advertising and channel expenses, and the management fee rate was 3.8%, -0.8 pct year on year, reflecting the revenue scale effect. The tax and surcharge ratio was 18.3%, +0.7 pct year on year, mainly due to production rhythm disturbances, and net interest rate increased 1.8 pct to 32.7% year on year.
The high increase in blue and white led to an increase in Q1 gross profit, and costs declined steadily and slightly. The 24Q1 gross profit margin was 77.5%, +1.9pct year on year. The main reason was that 23Q1 bofen accounted for a relatively high volume, while 24Q1 showed significant blue and white sales. The revenue from high-priced alcohol/other alcoholic beverages in Q1 was 1.19 billion yuan/340 million, +25%/+10% over the same period. The blue and white series is expected to grow by 30%. The 24Q1 sales expense ratio was 7.5%, the year-on-year -0.5pct, and the management expense ratio was 2.0%, and the year-on-year -0.1pct. The investment rate was stable and the cost rate decreased slightly. The 24Q1 net margin increased 2.8 pct year over year to 40.9%, and profitability continued to increase.
The core market south of the Yangtze River was +30%, and the market structure of “a red sun, five stars, and a fragrant world” was gradually formed. Revenue from outside the province in '22 was 19.66 billion yuan, +22.8% year-on-year, accounting for an increase of 0.8 pct to 61.9% of total revenue. The company's “One Red Sun, Five Stars, Fragrant World” market structure was gradually formed. The 1 billion yuan market continued to increase. The core market south of the Yangtze River increased by more than 30% over the same period last year, and the nationalization process was further expanded. It is expected to accelerate the leveling of investment in districts and counties and the improvement of the climate in the southern market, and can still maintain a high growth rate; the province's revenue is 12.08 billion yuan, +20.4% over the same period. Consumption upgrade in 23 is still obvious. Qing25 and Panama drive growth within the province, and the province is expected to maintain steady growth in the future. In 24Q1, revenue within and outside the province was 5.60 billion/9.70 billion yuan, +11%/28% year-on-year. Core market potential outside the province increased, driving a high increase in the company's revenue.
The tonnage price was 154,000, +5% over the same period, and the volume and price of medium- to high-priced alcohol rose sharply. In 2023, the sales volume was 206,000 tons, +16% year over year, of which the sales volume of medium- and high-priced alcohol/other alcoholic beverages was 60/ 146,000 tons, +11%/+18% year-on-year. In 2023, the tonnage price was 154,000, +5% year-on-year. Among them, the tonnage price of medium- and high-priced alcohol/ other alcoholic beverages was 387/59,000, +10%/+1% year-on-year, and the volume and price of medium- to high-priced alcohol increased sharply.
The target for 24 years is 20% growth, steady progress, and the pursuit of rapid and high-quality development. The company's annual report revealed that the 24-year revenue target is about 20%, which is the same as the 23-year target. It is guided by the business policy of “gathering potential, breaking through marketing and increasing efficiency; leading culture, upgrading brands to promote development; increasing production capacity, building a strong foundation to improve quality; upgrading management, empowering cohesion with digital intelligence”. As a 10 billion single product, Blue and White 20 must be “fast and good” to make greater breakthroughs; blue and white products 30 and above must form a trinity model of “human resources, material resources, and spiritual culture” to explore and create a successful development model that matches the culture and consumer culture of high quality life scenarios.
Revenue performance in the first quarter was +21%/+30% under a high base. The full year results are highly deterministic, and it is expected that rapid and high-quality development will be achieved in 24 years.
Investment advice: It successfully surpassed 30 billion in 23 years, is expected to maintain rapid and high-quality growth in 24, and maintain “highly recommended”! The company successfully surpassed 30 billion dollars in good condition, successfully surpassed 30 billion in 2023, and looked forward to 2024. In the context of the concentration of industry leaders, Fenjiu's “Fragrant World” pattern was initially formed, forming a nationwide consumer popularity, which is expected to continue to maintain rapid and high-quality growth. In addition, the company is actively strengthening its medium- to long-term competitiveness. Fenjiu's benefits are progressing well, and the revival version has clear operating ideas, which is expected to contribute to a new growth pole. The 24-26 EPS was slightly increased to 10.87, 13.57, and 16.20 yuan, corresponding to 24-year 23X. The target price is 293 yuan, maintaining the “Highly Recommended” investment rating.
Risk warning: Market demand in the province falls short of expectations, revival development falls short of expectations, blue and white price performance falls short of expectations, etc.