The company released its 2024 quarterly report
Single Q1: Revenue of 1,485 million (+8.64%), net income of 239 million (+59.70%), deducted non-237 million (+63.91%).
Q1 Profit side performance exceeded expectations.
Double-digit revenue growth in main categories
Product: 24Q1 soy sauce/ chicken essence/ cooking oil categories were +13.4%/+16.8%/-5.5%, respectively. The soy sauce category Q4 was actively adjusted, Q1 was lightweight, and the chicken specialty category was booming. It increased by more than 15% year on year for 4 consecutive quarters. Demand for edible oil was weak, but the decline narrowed month-on-month.
Region: 24Q1 East/ South/ Midwest/ North were +24.5%/+2.6%/+9.9%/+7.6% year-on-year. The Eastern region grew strongly, and regions with low penetration in the Midwest and North expanded.
Increased profitability
The 24Q1 gross margin was 36.98%, +5.57pct year on year. Product structure optimization and raw material purchase unit price reduction jointly drove the increase in gross margin. Sales Expense Rate/Management Expense Rate/R&D Expense Ratio were -0.85/-0.04/-0.34pct, respectively. Among sales expenses, sales staff expenses have been reduced, advertising and promotion expenses have increased, delivery is more accurate, and the rest of the cost control is more balanced.
24Q1 net margin was 17.63%, +5.96pct year over year, improving profitability.
Investment advice
Our point of view:
The current marketing structure and personnel adjustments have been completed, and the effects of the reform have been realized in Q1. The 3-year strategy has progressed steadily and the scale effect has increased, and profitability is expected to continue to improve.
Profit forecast: Combined with the above, we expect that in 2024-2026, the company will achieve total operating income of 57.77/68.28/10.01 billion yuan, +12.4%/+46.6% year-on-year; achieve net profit to mother of 7.53/9.51/15.35 billion yuan, or -55.7%/+26.4%/+61.4%; current stock price corresponding PE is 31/24/15 times, respectively, and the company's Q1 performance will be realized + growth and quality, maintaining a “buy” rating.
Risk warning
Downward macroeconomic risks, increased industry competition, regional expansion falling short of expectations, and new product releases falling short of expectations. The epidemic has repeatedly brought pressure on sales, catering repairs have fallen short of expectations, and food safety incidents.