Description of the event
In 2023, the company achieved total revenue of 2,635 billion yuan (+7.04%), net profit to mother of 166 million yuan (+19.74%), after deducting non-net profit of 144 million yuan (+25.6%). Total operating income of 2023Q4 was 220 million yuan (+10.77%), net profit attributable to mother of 75.5736 million yuan (year-on-year loss reduction), deducted non-net profit of 86.735 million yuan (year-on-year loss reduction). Total operating income of 2024Q1 was 207 million yuan (-4.13%), net profit attributable to mother - 697.596 million yuan (year-on-year increase in loss), deducting non-net profit of 705.23 million yuan (year-on-year increase in loss).
The company plans to pay a cash dividend of 10 yuan (tax included) to all shareholders for every 10 shares, accounting for 114.70% of net profit attributable to mother in the annual consolidated statements. The dividend rate was 3.63% at the closing price on April 24, 2024.
Incident comments
By product, the basic plate of rice dumplings is stable, and the second curve has yet to be released. Rice dumpling series revenue in 2023 was $1,940 million (+11.06%), 2023Q4 and 2024Q1 revenue were +28.33% and -2.32%, respectively; mooncake series 2023 revenue was 228 million yuan (-4.32%), 2023Q4 and 2024Q1 revenue were +22.73% and +656.41%, respectively; meal series revenue in 2023 was 148 million yuan (+4.78%), and 2023Q4 and 2024Q1 revenue were +13.38%, + 1.43%; egg products, pastries, and others had revenue of 253 million yuan (-5.54%) in 2023. 2023Q4 and 2024Q1 revenue were -14.72% and -7.07%, respectively. The company continues to sort out and optimize the product value chain, and continues to enhance product characteristics and core competitiveness in rice dumplings and non-rice dumplings through refining new products such as popped dumplings, popped rice balls, and milk-flavored raw coconut milk glutinous mooncakes. The average sales price of rice dumplings and mooncakes declined in 2023, mainly due to changes in product structure and consumption power.
By channel, chain stores are recovering and rebounding, and supermarket channel traffic is under pressure. Chain store revenue of 2023 was 364 million yuan (+26.68%), 2023Q4 and 2024Q1 revenue were +23.00% and -5.39%, respectively; e-commerce revenue of 2023 was 887 million yuan (+8.13%), 2023Q4 and 2024Q1 revenue were +23.58% and -24.09%, respectively; supermarket revenue in 2023 was 264 million yuan (-15.18%), 2024Q1 revenue +15.43% year over year; dealer revenue in 2023 At 909 million yuan (+10.89%), 2023Q4 and 2024Q1 revenue were -7.89% and +3.17%, respectively; revenue from other channels in 2023 was 145 million yuan (-6.85%), and 2023Q4 and 2024Q1 revenue were +30.00% and +15.01%, respectively. The number of company dealers increased by 7 to 714 in 2023. As of 2024Q1, the total number of company dealers was 610.
Looking at the year-round dimension, the average price reduction affects the gross profit margin of the product, and the cost control performance is steady. The company's net income margin increased by 0.67 pct to 6.29% in 2023, gross margin -1.1 pct to 36.39%, and the period expense ratio -0.80 pct to 29.05%, including sales expenses ratio (-1.01 pct), management expense ratio (+0.67 pct), R&D expense ratio (+0.13pct), and financial expenses ratio (-0.60pct). 2024Q1 net margin fell 4.09pct to -33.68%, gross margin -0.40pct to 34.28%, and period expense ratio +2.11pct to 70.41%, including sales expense ratio (+1.32pct), management expense ratio (+0.31pct), R&D expense ratio (+0.34pct), and financial expense ratio (+0.14pct). The gross margin of the rice dumpling and mooncake series declined year-on-year in 2023. Rice dumplings were mainly affected by rising raw material costs, while mooncakes were mainly affected by the decline in average sales price.
Profit forecast and investment advice: Net profit due to mother for 2024-2026 is expected to be $1.80, 1.94, and 216 million yuan, respectively; EPS is $1.25, 1.35, and 1.51, respectively. The current stock price PE is 22, 21, and 19X, respectively, maintaining a “buy” rating.
Risk warning
1. Food safety risks;
2. The risk of fluctuations in raw material prices;
3. Risk of seasonal fluctuations in operations.