Incident: ① In 2023, the company achieved revenue of 7.26 billion yuan, yoy +10%; net profit to mother of 340 million yuan, yoy +47%; deducted non-return of 40 million yuan, yoy +55%. ② In 24q1, the company achieved revenue of 1.70 billion yuan, yoy -7%; net profit to mother of 170 million yuan, yoy +20%; deducted from mother 160 million yuan, yoy +16%.
Our analysis and judgment:
Revenue side: 24q1 revenue declined year-on-year due to sluggish terminal consumption.
-2023: Store openings slowed, with a net increase of 874 stores in 23. By product, the company's fresh goods/packaged products/franchisee management revenue was 57.7/28/80 million yuan, yoy +6%/+33%/+11%; by region, Central China/South China/East China/ North China/ Southwest China earned 22.2/16.1/12.9/889/8.3 billion yuan, yoy +11%/+12%/+9%/+19%/-4%.
-24q1: by product, fresh goods/packaged products/franchisee management revenue of 13.5/0.6/0.2 billion yuan, -9%/-16%/-15%; by region, revenue of Central China/South China/East China/North China/North/Southwest China: 5.4/3.5/3.0/2.0/220 million yuan, YOY -7%/-10%/-6%/+0.4%/+1%
Profit side: Benefiting from declining raw materials, cost control, significant improvement in 24q1.
-2023: gross profit margin 24.8%, -0.8pct year on year; single q4 gross profit margin 26.9%, +4.4pct year on year, mainly due to a decline in duck side prices. In terms of expenses, the sales/management expense ratio for 23 years was -2.3 pct/-1.4 pct year on year; for single Q4, the sales/management expense ratio was -0.6 pct/-2.5 pct year on year. The decrease in the management expense ratio was mainly due to a decrease in share payment expenses. In addition, investment income losses of 130 million yuan and asset impairment losses of 54 million yuan dragged down performance. In '23, the company's net profit margin was 4.7%, +1.2pct year-on-year.
-24q1: gross profit margin 30.0%, +5.7pct year on year; net profit margin 9.7%, +2.2pct year over year.
Investment advice: As a leader in braised flavors, the company focuses on reducing cost pressure in the short term and increasing market share by focusing on same-store improvements in the long term. We expect net profit to be 8.2/9.5/1.12 billion yuan in 24-26 (taking into account the slowing recovery in consumption, down from the previous forecast. The previous net profit for 24-25 was 9.7/1.17 billion yuan), corresponding to PE16X/14X/12X, maintaining the “buy” rating.
Risk warning: risk of rising raw material costs; sales of new products falling short of expectations, etc.