Brief performance review
On April 28, the company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 3.499 billion yuan, +20.22% year on year; realized net profit of 73 million yuan, or -49.21% year on year; realized net profit after deduction of 122 million yuan, or -14.95% year on year. In 2024Q1, we achieved revenue of 916 million yuan, +15.31% year over year; net profit to mother of 77 million yuan, +53.96%; net profit after deducting non-attributable net profit of 68 million yuan, +40.29% year over year; net profit of 81 million yuan after excluding equity incentive expenses, net profit to mother was achieved, +22.28% year over year.
Management analysis
Cream products are growing rapidly, and supermarket channels are growing steadily. 1) By category: In 2023, frozen baking/cream/fruit products/sauces/other baking ingredients achieved operating income of 22.11/6.54/1.87/2.33/187 million yuan, compared to +23.93%/+27.65%/-8.45%/+18.12%/-8.75%. The frozen baking business recovered. The company's new UHT cream production line was put into operation and revenue exceeded 150 million yuan in half a year, driving strong growth in the cream business in the second half of the year. 24Q1 frozen baked goods remained basically flat year over year. UHT cream maintained a good growth trend, driving the company's cream sector to double in the first quarter. 2) Channel division: Distribution/direct sales/retail reached 19.71/14.88/212 million yuan respectively in 23 years, +4.32%/+49.23%/-21.82% year-on-year. The company's core supermarket channel revenue performance was steady, achieving a year-on-year increase of about 50% under the launch of new products; the catering and new retail channels maintained a relatively rapid growth trend in the context of actively expanding new customers, and the total growth nearly doubled. The 24Q1 distribution bakery channel achieved a 25% year-on-year increase, the supermarket channel declined by a single digit, and the restaurant and new retail channels achieved a year-on-year increase of more than 50%.
The gross margin remained stable, and the cost side improved in 24Q1. The gross margin for 23/24Q1 was 31.39%/32.59% respectively, -0.38/+0.56pct year on year. The slight increase in 24Q1 gross margin was mainly due to an increase in the company's capacity utilization rate and optimization on the procurement side. In terms of cost ratio, the company's 23/24Q1 sales expense ratio is 13.54%/12.10%, +1.63/+0.21pct; 23/24Q1 management rate is 9.56%/6.57%, +1.05/-0.73pct; R&D rate is 4.22%/3.55%, +0.02/-0.13pct; financial rate is 0.34%/0.19%, +0.62/-0.03pct year on year. The 24Q1 cost side is expected to continue to be optimized.
Profit Forecasts, Valuations, and Ratings
Company reforms continue to be carried out, product structure, capacity utilization rate and operating efficiency continue to be optimized. We are optimistic about the diversified layout of the company's channels, and profitability continues to improve. The company is expected to achieve revenue of 40.99/47.73/5.503 billion yuan in 24-26, +17%/15% year-on-year, and realized net profit of 2.9/3.4/40 billion yuan, +291%/20%/15% YoY, corresponding EPS 1.7/2.0/2.3 yuan, corresponding PE 19/16/14X, maintaining a “buy” rating.
Risk warning
Raw material prices fluctuated; downstream demand recovered less than expected; market competition intensified.