[Performance] In '23, the company's revenue and net profit to mother were $302.33/13.246 billion yuan (YoY +20.34%/+27.79%); 24Q1's operating revenue/net profit to mother/ was $91.88/4.574 billion yuan, respectively (+20.74%/+23.20% YoY). [Dividend Rate] According to the annual report, the dividend rate for 23 was 60% (same as the previous year). [24-year target] Strive to achieve a year-on-year increase in revenue of at least 15%.
Volume and price have risen sharply in 23 years, and the Guojiao series has driven an increase in tonnage prices.
In '23, the company's alcohol business revenue was 30.077 billion yuan (+21.45% year over year), of which the revenue of high-end liquors/other alcoholic beverages was 268.41/32.36 billion yuan (+21.28%/+22.87%), and the revenue of medium and high-end alcohol accounted for -0.12pct to 89.24% year over year. In terms of volume and price, volume and price have risen sharply in 23 years. Mid-grade liquor has benefited from a high price increase, with a significant increase in tonnage prices: +11.71%/+8.71% year-on-year sales of alcohol in '23, with sales of medium and high-end alcohol/other alcoholic beverages +1.24%/+19.64%; tonnage price +19.79%/+2.70%; gross profit margin of 92.27%/56.48% (+1.22/ +3.31 percentage points year on year).
The quantity and quality of traditional channels rose sharply in '23, and the share of emerging channels declined slightly. Revenue from traditional channel operating models/revenue from emerging channel operating models in '23 was 286.57/1,420 billion yuan (+22.98%/-2.97% YoY), of which traditional channel revenue increased 1.19 percentage points to 95.28%, while gross margin was +1.65 percentage points year-on-year to 89.03%, improving the traditional channel management structure. In terms of quality, the number of dealers changed year-on-year in 2023 - 15 to 1,814, and the average dealer size changed +22.45% year over year to 16.5806 million yuan/home. The channel quality performance was excellent.
The 23&24Q1 cost ratio declined, operating cash flow was impressive, and advance receipt performance was excellent.
Year 23: The company's gross margin/net margin changed by +1.71/+2.52 percentage points to 88.30%/43.95%, respectively. One of the reasons for the excellent net margin performance was that the cost ratio declined significantly: sales expenses rate/ management expenses ratio (including R&D) changed -0.58/-0.93 percentage points year over year to 13.15%/4.52%; operating cash flow changed +28.87% year on year to 10.648 billion yuan; contract debts+other current liabilities changed +120 million yuan to 3.20 billion yuan over the same period last year.
24Q1: The company's gross margin/net margin changed by +0.28/+0.92 percentage points to 88.37%/49.83%, and the net interest rate was still superior to the gross margin mainly due to the expense ratio continuing the downward trend: sales expenses rate/ management expenses ratio (including R&D) changed -1.23/ -0.79 percentage points year-on-year to 7.85%/2.82%; operating cash flow changed +188.94% to 4.359 billion yuan; contract liabilities and other current liabilities changed +9.14/-1.56 billion yuan, respectively billion yuan to 2,864 billion yuan.
Profit forecast: In 24, the company will “focus on the three cores” (focus on digital intelligence/upgrade the brand) and “promote six major upgrades” (upgrade the marketing model, resolutely comprehensively attack and accelerate breakthroughs in digital intelligence innovation, build a leading edge in digital intelligence/continuously enhance brand image/adhere to quality advantages/strengthen the transformation of scientific research achievements/strengthen coordination and linkage). Under the strong product matrix, the company's 15% revenue growth target for the whole year is expected to be achieved. We expect the company's revenue for 24-26 to be 366/438/ 51.1 billion yuan (up 21%/19%/17% year on year), net profit to mother of 162/196/23.4 billion yuan (up 23%/21%/20% year over year), and corresponding PE is 17X/14X/12X, respectively.
Risk warning: weak consumption; changes in industry policies; increased industry competition; sales of high-end products fall short of expectations.