occurrences
The company announced the 2023 Annual Report and 2024 Quarterly Report. In 2023, the company achieved total revenue of 24.559 billion yuan (-4.10%), net profit attributable to mother of 5.627 billion yuan (-9.21%), and net profit not attributable to mother of 5.395 billion yuan (-9.57%). With 2023Q4, the company achieved total revenue of 5.909 billion yuan (-9.30%), net profit due to mother of 1,298 billion yuan (-15.20%), and net profit of non-return to mother of 1,243 billion yuan (-15.39%). With 2024Q1, the company achieved total revenue of 7.694 billion yuan (+10.21%), net profit attributable to mother of 1.919 billion yuan (+11.85%), and net profit of non-return to mother of 1,860 billion yuan (+13.34%). The company plans to pay a cash dividend of 0.66 yuan (tax included) per share, with a dividend rate of 65.06%.
Q1 Revenue growth is accelerating, and dealers are continuously being optimized
1) Q1 revenue growth accelerated. In 2023, the company's revenue for soy sauce, seasoning sauce, oyster sauce and other products was 126.37, 24.27, 42.51 billion yuan, and 3.499 billion yuan, respectively, -8.83%, -6.08%, -3.74%, and +19.35%. Judging from volume and price, the annual sales volume of soy sauce, seasoning sauce and oyster sauce was -8.17%, -0.41%, and -1.92%, and the unit price ratio was -0.72%, -5.69%, and -1.86%. In 24Q1, the company's revenue for soy sauce, sauce, oyster sauce and other products was 40.85, 8.01, 12.82, and 1,067 billion yuan, respectively. Compared with the same period, +10.06%, +6.44%, +9.63%, and +22.10%, growth accelerated in Q1.
2) Both online and offline channels resumed positive growth in Q1. In 2023, the company's offline and online revenue was 219.26 million yuan and 889 million yuan respectively, -3.86% and -10.06% year-on-year; 24Q1 offline and online revenue was 69.43 million yuan and 291 million yuan respectively, +10.81% and +20.67% year-on-year.
3) All regions resumed positive growth in Q1, with the South leading the growth rate. In 2023, the company's revenue in the eastern, southern, central, northern and western regions was 43.54, 45.00, 50.49, 59.25, and 2,986 billion yuan, respectively, or -7.26%, -2.17%, -4.19%, -4.78%, -0.68%, and 24Q1 revenue was +10.33%, +21.81%, +10.21%, +6.46%, and +10.08%, respectively.
4) Dealers are continuously optimizing. At the end of 2023, the company had a total of 6,591 dealers, a net decrease of 581 for the whole year, a total of 6,506 dealers at the end of 24Q1, and a net decrease of 85 in Q1. Looking at the subregion, the number of dealers in southern Q1 achieved positive growth, with a net increase of 2.
Q1 Gross profit margin and net profit margin increased simultaneously
1) The gross margin of soy sauce increased by 2.34 pct in '23, and the gross margin of the company was +0.38 pct year-on-year in 24Q1. In 2023, the company's gross margin was 34.74%, -0.95pct year on year, mainly affected by the decline in sales scale and category structure; by product, the gross margins of the company's soy sauce, sauce, oyster sauce and other products were 42.63%, 35.49%, 29.00%, and 21.88%, respectively, +2.34, -1.79, -4.65, and -5.30pct. The gross margin of soy sauce increased; by channel, the company's offline and online gross margins were 36.48%, 28.14%, and -0.99 and -0.67pct, respectively. In 24Q1, the company's gross margin was 37.31%, +0.38pct year-on-year.
2) The company's management and financial expenses ratio has improved in 23 years. In 2023, the company's net interest rate to mother was 22.91%, -1.29pct year on year, mainly due to a decrease in gross margin and an increase in management and financial expenses.
In 2023, the company's sales, management, and financial expense ratios were 5.32%, 2.14%, and -2.38%, respectively, -0.06, +0.42, and +0.48pct. The increase in financial expense ratios was mainly due to a decrease in interest income; gain/revenue from fair value changes was +0.39pct to 0.87% year over year.
3) Net profit margin increased in Q1. In 24Q1, the company's net interest rate to mother was 24.94%, +0.37pct year-on-year.
Looking at the cost ratio, the 24Q1 company's sales, management, R&D, and financial expenses rates were 5.50%, 1.61%, 2.41%, and -1.33%, respectively, +0.27, -0.00, -0.38, and +0.22pct compared to the same period.
Investment advice
We expect the company's net profit to be 62.37, 68.08, and 7.406 billion yuan respectively in 2024, 2025, and 2026, up 10.84%, 9.15%, and 8.79% year-on-year, corresponding to PE 35, 32, and 29 times (market value of 216 billion yuan) on April 26, respectively, maintaining the “buy” rating.
Risk warning
Food safety risk, raw material price fluctuation risk, risk of poor downstream inventory removal.