2023Q4 revenue was under pressure during the profit phase, and 2024Q1 was operating smoothly. In 2023, we achieved total revenue of RMB 33.126 billion, +10.04% YoY; net profit to mother of RMB 10.016 billion, +6.80% YoY. Among them, 2024Q4 revenue was 2,843 billion yuan, or -21.51% YoY; net profit to mother was 188 million yuan, -161.28% YoY.
2024Q1 revenue was RMB 16.255 billion, +8.03% YoY; net profit to mother was RMB 6.055 billion, +5.02% YoY.
In 2023, the company's dividend rate was further increased to 70.1%, corresponding to the current dividend rate of about 4.66%, making the valuation cost ratio outstanding.
The product structure is slightly stressed. By product, revenue from high-end liquor/regular alcohol in 2023 was 285.4/3.95 billion yuan respectively, +8.82%/+20.70%. The decline in product structure was mainly due to the slowdown in main product upgrades under external environmental pressure, and the cost performance ratio of popular prices such as Yanghe Daqu and Shuanggou was prominent. In terms of volume and price, liquor sales volume in 2023 were -14.9% year-on-year, and the tonnage price was +30.2%. Price growth is still the main driving force for the company's revenue growth. The overall gross margin for the whole year was +0.64pct year-on-year to 75.25%. Looking at the subregion, revenue within the province/outside the province in 2023 was 143.9/18.10 billion yuan respectively, +8.05%/+11.85% compared to the same period, accounting for 44.30%/55.70%. The company continued to explore the market outside the province, and the number of distributors within the province/outside the province was 17/+568 throughout the year.
2024Q1's operating quality has recovered well, and cash flow is superior to revenue growth. 2024Q1's revenue and net profit continued to grow steadily. M6+ performed well in high-end banquets and gift scenarios, the provincial offshore blue market was stable, and the overall gross profit margin was 76.0% /-0.6 pct year over year. As of the end of the first quarter, the company's contract liabilities decreased by 47.6% compared to the beginning of the period, mainly due to receiving payment from dealers before the Spring Festival to confirm delivery revenue in 2024Q1.
After the Spring Festival, the company's repayment schedule accelerated, with sufficient orders in hand. 2024Q1 sales revenue was 12.906 billion yuan/+25.1% YoY, and net cash flow from operating activities was 4.85 billion yuan/year over year +245.8%.
In 2023, promotion efforts will increase, and the 2024Q1 fee investment is more rational. In 2023, the company's sales expense ratio was +2.4 pct to 16.3% year on year, of which the 2023Q4 sales rate was +19.0 pct year on year, increasing mainly due to year-end cost fulfillment and forecasting. The 2024Q1 sales rate was +1.1 pct to 8.5% year-on-year, and spending efforts were rationally reduced after the Spring Festival. In 2023, the management fee rate was -1.1 pct to 5.3% year on year, and the 2024Q1 management fee was -0.9 pct to 2.8% year over year, mainly due to the company's internal management optimization and scale effect. Product structural pressure combined with sales rate disturbances. 2023/2024Q1 deducted 30.2%/37.2% of non-net interest rates, respectively, -1.1 pct/-0.4 pct.
Risk warning: demand recovery falls short of expectations; industry competition intensifies; industrial policy risks, etc.
Investment advice: Competition within the province has intensified in the short term, and it will still take time for the results of the reform to become apparent. The previous profit forecast was lowered. Revenue for 2024-2025 is estimated to be 348.5/38.26 billion yuan (previous value was 365.4/40.34 billion yuan), up 5.2%/10.3% year on year; net profit to mother of 102.4/11.28 billion yuan (previous value was 110.1/12.21 billion yuan), up 2.3%/10.1% year on year. The P/E corresponding to the current stock price is 14.7/13.4 times, respectively, maintaining the “buy” rating.