Incident: The company released its 2023 report and 2024 quarterly report. For the full year of 2023, it achieved operating income of 1.48 billion yuan (-0.6%) and realized net profit of 40 million yuan (+5.4%); 2024Q1 achieved operating income of 380 million yuan (+17.3%), and realized net profit of 0.1 billion yuan (+3.9%). At the same time, the company plans to distribute a cash dividend of 1.5 yuan (tax included) for every 10 shares to all shareholders.
Direct sales are leading the way in growth, and the small delivery model is beginning to bear fruit. 1. By category, fresh soy products, vegetable protein drinks, and casual soy products achieved revenue of 980 million yuan (-0.1%), 220 million yuan (-6.5%), and 70 million yuan (-1.9%) respectively in 2023. The company has a rich product range, covering more than 400 varieties. 2. By channel, distribution, direct sales, and supermarkets achieved revenue of 910 million yuan (-2.8%), 210 million yuan (+28.9%), and 320 million yuan (-11.3%) respectively in 2023. The company's sales network is deeply cultivated in Jiangsu, Zhejiang and Shanghai, covering large and medium-sized cities in China. In addition, the company explored a small-scale distribution model to directly control terminal outlets, and the pilot showed initial results. 3. On the brand side, the company became the official supplier of soy products for the Hangzhou Asian Games and the Asian Paralympic Games, which is conducive to further enhancing the brand image.
Reduced soybean prices led to an improvement in gross margin. 1. In 2023, 2024Q1's gross margins were 27.3% (+1.9pp) and 24.8% (-0.9pp), respectively. The purchase price of soybeans has declined steadily, and gross margin will gradually improve. 2. The 2023 sales expense rate, management expense rate, R&D expense ratio, and financial expense ratio were 15.1% (-0.2pp), 5.5% (+0.8pp), 0.8% (+0.2pp), and 1.3% (+0.7pp), respectively. The increase in financial expenses was mainly due to large fluctuations in exchange earnings during the same period last year; 2024Q1 sales expenses rate, management fee rate, R&D expense rate, and financial expense ratio were 14.3% (-0.6pp), 5.2% (+0.5pp), 0.7% (-0.4pp), 2% (+ 0.4pp), and 2% (+ 0.5 pp). 3. In 2023, 2024Q1's net interest rates were 2.3% (-0.2pp) and 1.8% (-0.9pp), respectively.
Employee shareholding+stock options, dual incentives show confidence. 1. The company issued employee stock ownership and stock option plans, which provided incentives for no more than 60 people and 41 people respectively. This incentive covers a wide range of topics, and the company-level assessment goals are reasonable, which will fully stimulate the vitality of employees and the company. 2. Taiyuan, Guizhou and Beijing joint ventures have been established, which are managed uniformly by the company to effectively complete resource integration.
Profit forecast: The estimated net profit for 2024-2026 is 50.48 million yuan, 62.44 million yuan, 76.79 million yuan, and EPS is 0.40 yuan, 0.50 yuan, and 0.62 yuan respectively. The corresponding dynamic PE is 38 times, 31 times, and 25 times, respectively.
Risk warning: The risk of soybean prices continuing to rise; project implementation or falling short of expectations.