occurrences
The company announced the 2023 Annual Report and 2024 Quarterly Report. In 2023, the company achieved total revenue of 2,635 billion yuan (+7.04%), net profit attributable to mother of 166 million yuan (+19.74%), and net profit not attributable to mother of 144 million yuan (+25.60%). With 2023Q4, the company achieved total revenue of 220 million yuan (+10.77%), net profit attributable to mother of 76 million yuan (+16.04%), and net profit of non-return to mother of 87 million yuan (+20.18%). With 2024Q1, the company achieved total revenue of 207 million yuan (-4.13%), net profit attributable to mother of -70 million yuan (-9.11%), and net profit of non-return to mother of -171 million yuan (-1.15%). The company plans to pay a cash dividend of 1 yuan (tax included) per share, with a dividend rate of 84.56%. In addition to the amount repurchased by the company through centralized bidding in '23 (treated as dividends), the dividend rate will reach 114.70%.
In '23, rice dumpling revenue was +11%, and chain stores gradually recovered
1) +11% revenue from rice dumplings in 2023. In 2023, the company's revenue for rice dumplings/mooncakes/meals/ “egg products, pastries and others” series products was 19.40/2.28/1.48/253 million yuan respectively, +11.06%/-4.32%/+4.78%/-5.54%, leading the revenue growth rate of boxing products; 23Q4, revenue for each product was 0.60/0.73/0.35/ 0.35 billion yuan, respectively, +28.33%/+22.73%/+13.38%/-14.72%; 24Q1, the revenue of each product was 0.90/0.00/0.36/0.66 billion yuan, -2.32%/+656.41%/+1.43%/-7.07% YoY.
2) The gradual recovery of chain stores. In 2023, the company's chain store/e-commerce store/supermarket/dealer/other channel revenue was 3.64/8.87/2.64/9.09/145 million yuan respectively, +26.68%/+8.13%/-15.18%/+10.89%/-6.85%, chain stores gradually recovered; 24Q1, revenue from each channel was 0.75/0.28/0.18/0.55/ 0.18 billion yuan, year-on-year, -5.39%/-24.09%/+15.43%/+3.17%/+15.01% .
3) The number of dealers is stable. At the end of 2023, the company had a total of 714 dealers, +0.99% year over year. At the end of 24Q1, the total number of dealers was 610, -4.69% year over year.
Prices of raw materials fluctuated, and gross margin declined slightly
1) Prices of raw materials fluctuated, and gross margin declined slightly. In 2023, the company's gross margin was 36.39%, 1.10pct year on year, of which the gross margin of rice dumplings/mooncakes/meals/ “egg products, pastries and other” series products was 38.91%/22.42%/57.08%/21.68%, respectively, -2.39/ -1.68/+8.09/-2.50pct; 24Q1 gross margin was 34.28%, year-on-year.
2) The net interest rate due to mother increased in '23. In 2023, the company's net profit margin was 6.29%, +0.67pct year on year, and the 24Q1 net profit margin was -33.68%, or -4.09pct year on year.
3) Sales and financial expenses rates have declined. In 2023, the company's sales, management, R&D, and financial expense ratios were 20.93%, 7.54%, and -0.17%, respectively, -1.01, +0.67, +0.13, and -0.60pct. The decline in sales expenses was mainly due to a decrease in sales-related employee remuneration, and the increase in management expenses was mainly due to increased remuneration of management-related employees and equity incentive expenses. The decrease in financial expenses was mainly due to an increase in interest income.
4) Income tax expenses: In 2023, corporate income tax expenses/revenue were -0.97pct year-on-year, mainly affected by deferred income tax (decrease in deferred income tax assets in the current period).
Investment advice
We expect the company's net profit to be 1.98, 2.29 million yuan, and 257 million yuan respectively in 2024, 2025, and 2026, up 19.21%, 15.83%, and 12.09% year-on-year, corresponding to PE 20, 17, and 15 times (market value of 3.9 billion yuan) on April 26, respectively, maintaining the “gain” rating.
Risk warning
Food safety risks, raw material price fluctuation risks, and risk of product expansion falling short of expectations.