The company released its 2023 annual report and 2024 quarterly report. In 2023, we achieved revenue of 14.045 billion yuan, +15.29% year over year; net profit attributable to mother of 1,478 billion yuan, +34.24% year over year; net profit without return to mother of 1.365 billion yuan, +36.80% year over year. 2024Q1 achieved revenue of 3.755 billion yuan, +17.67% year over year; net profit of 438 million yuan, +21% year over year; net profit without return to mother of 420 million, +21.56% year over year.
The main business is resilient, consolidating its leading position in the industry. (1) By product: In 2023, the noodle and rice products/meat products/surimi products/dishes business achieved revenue of 25.5/26.3/44.1/3.93 billion yuan respectively, +5.4%/+10.2%/+11.8%/+29.8% compared with the same period last year. 2023Q4/2024Q1 revenue from noodle and rice products -4.3%/+4.4% YoY, revenue from meat products -6.3%/+27.7% YoY, surimi products revenue -3.6%/+31.5% YoY, dish revenue -10.7%/+12.3% YoY. Hot pot products benefited from the increase in the Marunoson series products and the increase in sales of fresh-packed products, and the noodle and rice business showed significant improvements. The performance of the noodle rice business was weak due to the market environment in supermarkets and increased market competition. (2) Subchannels:
Distribution/supermarket/e-commerce and new retail channels achieved revenue of 113.7/8.5/10.7/3.2/4.4 billion yuan in 2023, respectively, +16.0%/-13.4%/28.9%/145.9%/-0.3%. Channel expansion was smooth, and 2024Q1 revenue was +22.6%/-6.3%/flat/+35.6%/-8.3% year-on-year.
Cost reduction and efficiency have been strengthened across the board, and the effects of scale continue to show. In 2023/2024Q1, the company achieved a gross profit margin of 23.2%/26.6%, +1.3/1.8pct, respectively. The increase in gross margin mainly benefited from cost improvements such as surimi, product structure optimization, and efficiency improvements brought about by scale effects. In 2023, the company's sales/management/R&D expenses ratio was -0.6/-0.07/-0.10pcts year on year, and 2024Q1 changed +0.1/+0.3/+0.0pct year on year, respectively. The cost ratio remained stable. The final net interest rate corresponding to 2023/2024Q1 was 10.7%/11.8%, respectively, +1.5/+0.1pct.
Profit forecasting and investment advice. The company is expected to achieve revenue of 161.1/181.2/20.06 billion yuan in 2024-2026, +14.7%/+12.5%/+11.8% year-on-year; realized net profit to mother is 16.5/19.2/2.16 billion yuan, respectively, corresponding to PE15/13/11 times. Referring to a comparable company, a valuation of 22 times 2024 was given, corresponding to a reasonable value of 123.65 yuan, maintaining the “buy” rating.
Risk warning. Market competition increases risks, fluctuating raw material prices, food safety risks, etc.