occurrences
On April 26, 2024, Yasui Foods released its 2023 Annual Report and 2024 First Quarter Report.
Key points of investment
The performance growth rate is steady, and the dividend ratio has increased dramatically
The company's total revenue for 2023/2023Q4/2024Q1 respectively
140.45/37.74/37.55 billion yuan, +15%/-6%/+18%, respectively, and net profit to mother was 1,478/356/438 million yuan, respectively, +34%/-13%/+21% year-on-year, respectively. 2024Q1 Marunosaka/Lock Fresh Packaging was quickly released, increasing profit performance while expanding the scale of revenue. On the profit side, thanks to the rapid growth of high-margin frozen surimi products, the company's gross margin was 23.21%/26.55% in 2023/2024Q1, with sales expenses of 6.59%/7.45%, respectively, -1 pct/+0.1 pct, respectively. The slight increase in 2024Q1 sales expenses is mainly due to an increase in the frequency of e-commerce promotions/conferences. The annual fee rate is expected to remain flat year on year.
The 2023/2024Q1 management expense ratios were 2.74%/3.12%, respectively, -0.1pct/+0.3pct year-on-year, respectively. Taken together, the company's net interest rate increased by 2pct/0.1pct to 10.69%/11.75% respectively in 2023/2024Q1. According to the dividend plan, the company's cumulative dividend ratio in 2023 was 53.17%, a significant increase over the previous year. The company announced a shareholder return plan for 2024-2026, which plans to increase the annual cash dividend ratio to no less than 40% of the current year's distributable profit.
The main frozen business continues to have potential, and the single product development ideas are clear
In 2023, frozen noodle rice products/meat products/surimi products/dish products achieved revenue of 25.45/26.27/44.09/3,927 billion yuan respectively, an increase of 5%/10%/12%/30%, respectively. Sales volume was 23.54/18.61/31.47/196,900 tons, respectively, with a same increase of 5%/9%/12%/33%, respectively.
1.08/1.41/1.40/19,900 yuan/ton, +0.4%/-2% year-on-year, respectively. Among rice and noodle products, yakimai's revenue increased by 40% in 2023, and revenue from walnut packs exceeded 100 million. The rapid growth rate of cooking products was mainly due to the increased contributions of Xinliuwu and Yasui's Little Chef series products. Among them, shrimp paste and crispy meat achieved a 50%/70% increase in revenue, respectively. 2024Q1 quick-frozen rice products/meat products/surimi products/dish products achieved revenue of 6.38/7.85/12.73/955 billion yuan respectively, up 4%/28%/31%/12% respectively. The growth of the 2024Q1 main business was in line with expectations. Mr. Frozen remained flat as a whole, and Xinhongye/Xinliuwu were greatly affected by the crayfish market. Subsequent companies will sell products in the off-season for Lock Fresh Packaging 5.0, focusing on promoting the layout of sausages, and at the same time adhering to the territorial transformation of factories and harvesting popular products in the region. It is expected that the main business revenue will increase by 10%-15% in 2024.
Dealers continue to develop and grow steadily in various regions
The core dealer channel continued to grow, and the supermarket channel was under year-on-year pressure. In 2023, dealer/supermarket/ e-commerce channel revenue was 113.69/8.47/10.71/3.20/437 billion yuan, respectively, +16%/-13%/+29%/+146%/-0.3%. By the end of 2023, the company had 1964 dealers, a net increase of 128 over the beginning of the year.
The revenue of 2024Q1 dealers/supermarkets/e-commerce and new retail channels was 30.29/2.90/2.43/1.19/0.73 billion yuan respectively, +23%/-6%/+0.02%/+36%/-8%, respectively. The pressure on supermarket channels was mainly due to reduced passenger flow/closure of some stores, and e-commerce channels continued to increase. Balanced development across regions. 2024Q1's revenue in Northeast China/North China/East China/Southwest/Southwest/Overseas regions was 2.96/5.27/16.76/3.22/4.42/1.95/2.56/0.41 billion yuan, respectively, +25%/+20%/+17%/-0.5%/+27%/+22%/+67%. The company continued to strengthen its regional market position through channel sinking and new product promotion, and each region grew steadily.
Profit forecasting
We are optimistic that the company will enhance the competitiveness of large single products in omnichannel channels, continue to harvest the share of explosives in the region, and continuously boost profitability through product structure optimization. According to the annual report and quarterly report, EPS for 2024-2026 is expected to be 5.84/6.79/7.83 yuan, respectively. The current stock price corresponds to PE 16/13/12 times, respectively, maintaining a “buy” investment rating.
Risk warning
Downside macroeconomic risks, growth in Xinhongye and Xinliuwu falling short of expectations, failure to meet equity incentive targets, falling short of expectations in production capacity expansion, rising raw materials, etc.