Incident: On April 25, the company announced that 24Q1 achieved revenue of 550 million yuan, +6.6% year on year; net profit to mother was 80 million yuan, -3.7% year over year.
Coconut drinks performed well, and canned fruit was pressurized due to their high base. 24Q1 revenue was +6.6% year-on-year, achieving steady growth despite high base pressure. By category, 24Q1 coconut juice revenue was +26%, mainly due to: 1) the popularity of the coconut-based beverage category was high; 2) the cost performance advantage of the company's products became more obvious in the context of the slow pace of macroeconomic recovery; 3) the dividends of intensive cultivation in the beverage channel continued to be released. 24Q1 revenue from canned yellow peaches/canned oranges was -32%/+5% year-on-year, mainly due to high base pressure. 24Q1 New business and new channels continue to advance: 1) canned fruit has entered some leading snack channels, and drinks have been introduced into this channel one after another, and revenue is increasing month by month; 2) initial contacts have been made in raw material sales and other businesses; 3) Actively lay out coconut shark, increase brand promotion efforts, collaborate on online and offline channels, and lay out the summer ready-to-drink market ahead of schedule.
High base+increased investment, profit margins are still at historically high levels. The net interest rate for 24Q1 was 14.9%, -1.6 pcts year over year. The main factor base is higher and the cost investment increased. In fact, profit margins are still at a historically high level. Looking at the breakdown, the 24Q1 gross profit margin was 38.7%, +1.8pcts year over year, mainly due to the increase in the share of coconut milk revenue with higher gross margin and a slight decrease in the price of raw materials such as pets and cartons; the sales expenses ratio was 12.9%, +3.9 pcts year over year, mainly due to increasing personnel development and maintenance of the terminal market through traditional channels; and the management cost ratio was 5.3%, +0.4pcts year over year, which remained stable.
24Q2 focuses on marketing and marketing of new products, and continuous channel intensive cultivation of large coconut milk products. In the short term, the pressure on the 24Q2 base has gradually eased, intensive channel cultivation of large coconut milk products continues, offline sales of new coconut shark products begin during the peak season, compounded by a rise in revenue from snack sales channels. The revenue side growth rate is expected to rise sequentially. Looking at the long term, 1) in the traditional business, the company's canned fruit and coconut drinks have a high cost performance advantage, and the channel still has a lot of room to sink, and is expected to achieve continuous steady growth under the target of 24 million terminal outlets; 2) The new business, on the one hand, is successfully introduced into the snack volume sales channel, which is expected to share channel dividends. On the other hand, the supply chain is expected to turn coconut water into the second growth curve with advantage+O'Neal brand spokesperson and channel advantage. In addition, the company is actively developing a coconut raw material sales business, which is also expected to contribute to revenue growth.
Investment advice: Net profit from 2024 to 2026 is expected to be 3.3/39/4.7 billion yuan, respectively, +17.8%/19.1%/19.2%, EPS 0.7/0.9/1.0 yuan, and PE 21/17/15X. However, considering the uncertain pace of new products and new channel expansion, the “Cautious Recommendation” rating will be maintained for the time being.
Risk warning: risk of competition exceeding expectations, risk of new business expansion falling short of expectations, food safety risk.