The company released its 2023 annual report and 2024 quarterly report: in 2023, the company achieved operating income of 3,747 billion yuan, a year-on-year increase of 15.37%; realized net profit of 233 million yuan, an increase of 120.12% over the previous year; realized net profit of 225 million yuan after deduction, an increase of 147.22% over the previous year. 2023Q4 achieved revenue of 1,035 million yuan, an increase of 28.44% over the previous year; realized net profit of 56 million yuan, an increase of 748.55%; and realized net profit of 55 million yuan after deduction, an increase of 338.55% over the previous year. In 2024Q1, the company achieved revenue of 878 million yuan, an increase of 24.42% over the previous year; realized net profit of 56 million yuan, an increase of 259.00% over the previous year; realized net profit of 54 million yuan after deduction, an increase of 298.05% over the previous year.
Revenue from various products grew steadily, building a full industry chain: 1) Pet snacks: In 2023, the company achieved revenue of 2,351 billion yuan, up 9.81% year on year; 2) Canned pet food: In 2023, the company achieved revenue of 635 million yuan, up 5.76% year on year; 3) Pet staple food: In 2023, the company achieved revenue of 577 million yuan, an increase of 60.23% year on year. By covering pet staple food, wet food, snacks, etc., with a total of more than 10 product lines and more than 1,000 varieties, the company has built a whole industry chain and promoted steady revenue growth.
Internal and external training, continuing to explore domestic and foreign markets: 1) In 2023, the company's domestic business achieved revenue of 1,086 billion yuan, an increase of 20.40% over the previous year. In the domestic market, the company mainly explores the domestic market by launching new media such as Douyin and Xiaohongshu, participating in domestic exhibitions, sponsoring large-scale pet events and website promotion; 2) The company's overseas business achieved revenue of 2,662 billion yuan, an increase of 13.44% over the previous year.
In 2023, the company's products were sold to the United States, the European Union, Japan and other countries and regions. While striving to expand the OEM/ODM product market, the company gradually strengthened the promotion of its own brands in foreign markets and actively cultivated the independent brand market by participating in international exhibitions and advertising.
Profit forecast and rating: We expect the company's net profit for 24-26 to be 287, 3.45, and 391 million yuan, respectively, up 23.2%, 20.0%, and 13.4% year-on-year. The current closing price corresponds to 2024-2025 PE 25 and 21 times. As a leading pet products company, refer to comparable companies that give the company a PE valuation of 29 to 30 times in 2024, corresponding to a reasonable value range of 28.33 to 29.30 yuan, corresponding to PS of 1.89 to 1.96 times, giving “superior to the market” ratings.
Risk warning: Market competition has intensified, raw material costs have risen, and exchange rate fluctuations have intensified.