Event: The company achieved revenue of 30.233 billion yuan in 2023, +20.34% year over year; net profit to mother was 13.246 billion yuan, +27.79% year over year. Of these, 23Q4 achieved revenue of 8.291 billion yuan, +9.10% year-on-year; net profit to mother was 2,680 billion yuan, +24.78% year-on-year. In 24Q1, revenue of 9.188 billion yuan was achieved, +20.74% year-on-year; net profit to mother was 4.574 billion yuan, +23.20% year-on-year. The annual dividend rate for '23 was 60%, corresponding to a dividend rate of 2.9%.

Performance grew steadily, and Guojiao led to an increase in tonnage prices. By product, the company's revenue for high-end liquors/other alcoholic liquors in 23 years was 26.841 billion yuan/32.36 billion yuan, +21.28%/+22.87%, respectively. The growth rate of Chinese cellars is expected to be slightly higher than the overall growth rate, and the growth rate of low-end liquors such as headquarter is higher than the overall growth rate. Benefiting from the implementation of the company's “Spring Thunder” and “Autumn Harvest” actions, the market consumption market continues to increase, the granary market is being built and cultivated intensively, and the opportunity market has steadily penetrated. The sales volume/tonnage price of high-end alcohol in the middle of the year was +1.24%/+19.79%, respectively, and the sales/tonnage price of other alcoholic beverages changed +19.64%/+2.70% year on year, respectively. The tonnage price of middle and high-end wine increased significantly.

Overall expenses are well controlled, and profit levels continue to rise. The company's 23-year gross profit margin was 88.30%, +1.71pct; 24Q1 company's gross profit margin was 88.37%, +0.28pct; the company's 23/24Q1 sales/management/ R&D expense ratios were 13.15%/3.77%/0.75% and 7.85%/2.49%/0.33%, respectively, -0.58/-0.86/-0.07pct and -1.23/-0.79/+0pct; 23/24Q1 net profit margin +2.52/+ 0.92pct to 43.95%/49.83%. The company's basic management is continuously improved. Through strict budget management and internal cost reduction activities, the accurate and effective use of capital is ensured, the cost-sales ratio and various expenses are effectively reduced, and the level of profit is continuously improved. The company's contract debt balance at the end of 24Q1 was 2,535 million yuan, up 809 million yuan year on year, down 138 million yuan; 24Q1 revenue was 10.641 billion yuan, +32.31% year over year; net cash flow from operating activities was 4.359 billion yuan, +188.94% year over year, with excellent cash flow performance.

Investment advice: The company announced its 2024 business plan and strives to achieve revenue of +15% or more compared to the same period last year. We believe that while focusing on Guojiao's “volume and price balance” this year, the company's superior waist products are also expected to maintain strong momentum. Combined with the continued improvement of the company's cost control, it is expected to achieve continuous high-quality growth. We expect the company's revenue/net profit to be +21%/+22% year-on-year, corresponding to 18 times PE in 24, maintaining a “buy-A” rating. The target price for 6 months is 275 yuan, which is equivalent to a dynamic price-earnings ratio of 25 times in 2024.

Risk warning: macroeconomic downturn, worsening competition pattern, food safety risks.