2023 results are under pressure, 2024Q1 revenue growth resumes
The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved revenue of 8.05 billion yuan, -14.8% year-on-year; net profit to mother of 180 million yuan, or -46.3% year-on-year. 2024Q1 achieved revenue of 2.45 billion yuan, +2.8% YoY; net profit to mother was 60 million yuan, or -58.0% YoY. In 2023, the shift in online traffic to content e-commerce platforms led to a sharp year-on-year decline in the company's e-commerce business revenue, leading to a decline in business performance throughout the year. In the first quarter of 2024, channel expansion and New Year's Day marketing brought about rapid growth in the company's group buying business, which encouraged the company's revenue side to resume positive growth, but the decline in gross margin caused by price cuts still put pressure on the company's profit side. Considering the impact of price cuts, we lowered our 2024-2025 profit forecast and added a 2026 profit forecast. We expect net profit to be 1.86 (-3.16) /2.21 (-3.97) /258 million yuan respectively for 2024-2026, corresponding to EPS 0.46 (-0.79) /0.55 (-0.99) /0.64 yuan, respectively. The current stock price corresponding to 2024-2026 PE is 31.6/26.7/22.8 times, respectively. We are optimistic about the results of the company's “high-end cost performance ratio” strategy Cash out gradually, maintaining a “buy” rating.
The group buying business performed well, and the e-commerce business is beginning to improve
In the first quarter of 2024, the company continued to optimize its omnichannel layout to promote continuous optimization and improvement of e-commerce, direct retail and group buying businesses. On the e-commerce side, the company adjusted its online business strategy, actively expanded new e-commerce channels, and achieved rapid development on instant retail platforms such as Meituan, Park Pu, and Yonghui, driving e-commerce business revenue +6.7% to 1.29 billion yuan over the same period last year. In terms of direct retail, the company adheres to the “good goods are not expensive” price strategy, improving the competitiveness of the product market by reducing the prices of more than 300 products, and driving the direct retail business +10.2% year over year to 640 million yuan. In terms of group buying, the company further expanded its retail supermarket customer network in Northeast China, North China and Northwest China during the 2024 New Year Festival, driving group buying business revenue +57.3% year-on-year to 180 million yuan.
Direct management+e-commerce and group purchases go hand in hand. In terms of direct business, the full year performance of 2024 can be expected to improve. The company is expected to continue to optimize the single-store model by promoting WeChat private and local lifestyle platforms and launching new categories such as ready-to-eat frozen products to promote a steady increase in the number of customer orders. In terms of e-commerce business, the company is expected to enhance the competitiveness of the restructuring business through product innovation, new channel development, and user stickiness, and promote the continued recovery of e-commerce business. In terms of group buying business, the company is expected to achieve more steady performance growth by deepening the expansion of group buying channels.
Risk warning: Store expansion falls short of expectations, online channels continue to be impacted, and category expansion falls short of expectations.