B and C are making concerted efforts, production capacity has been released one after another, and the “increase in holdings” rating is maintained
The company achieved revenue of 800 million yuan in 2023, up 0.1% year on year, net profit of 140 million yuan, down 5.4% year on year; in 2023Q4, revenue of 180 million yuan, down 5.7% year on year, and net profit of 28.2 million yuan, down 13.9% year on year. 2024Q1 achieved revenue of 170 million yuan, a year-on-year decrease of 17.9%, and net profit of 18.91 million yuan, a year-on-year decrease of 46.9%. Due to weak terminal demand, we lowered our profit forecast for 2024-2025, and estimated net profit for 2024-2025 to be 130 million yuan and 140 million yuan (previously 2.08 million yuan and 253 million yuan), respectively, and an additional profit forecast of 160 million yuan for 2026; EPS was 0.93, 1.03, and 1.13 yuan, respectively. The current stock price corresponds to PE 30.1, 27.1, and 24.8 times, and has great potential for multi-channel layout, maintaining a “gain” rating.
Demand for terminals is weak, and revenue is declining
Specifically: (1) By product: 2024Q1 beef/poultry/pork/lamb/aquatic shrimp/aquatic fish revenue was -24.9%/-15.94%/-12.87%/-24.79%/-19.78%/-20.63% year-on-year, respectively. Apart from the growth of other products, all other products declined; (2) by region: 2024Q1 headquarters in East China market, revenue fell 17.51%; revenue in the central and southwestern regions of the peripheral market increased 8.26% year on year; (3) Channel: 2021Q4 The year-on-year increase in supermarket channels 25% Looking ahead to 2024, the company will continue to explore new markets and new customers, and revenue is expected to grow.
The decline in net interest rate was mainly due to an increase in the expense ratio
The company's 2024Q1 net margin fell 6.2pct year-on-year to 11.4%, mainly due to an increase in the expense ratio. The gross margin of 2024Q1 decreased by 1.2 pct to 25.0% year on year; the sales expense ratio increased by 1.7 pct to 6.0% year on year, mainly due to the expansion of sales regions and new channels and the increase in personnel. The management fee rate increased by 2.9 pct to 7.5% year over year. Looking ahead to 2024, the company will continue to control costs; rates are expected to remain high during the development of new markets and new customers; sharing expenses such as depreciation after the launch of the new plant will affect the company's profitability in the short term.
Risk warning: consumption downgrade, food safety, the impact of the epidemic on consumer demand, market expansion falling short of expectations, production capacity investment falling short of expectations.