incident. The company released its 2023 annual report: In 2023, the company achieved total revenue of 33.126 billion yuan, +10.0% year on year, net profit to mother of 10.016 billion yuan, +6.8% year on year. Among them, the Q4 single quarter achieved total operating income of 2,843 billion yuan, -21.5% year on year, and net profit to mother - 188 million yuan, -161.3% year on year.
At the same time, the 2023 profit distribution plan was announced, with a cash dividend of 46.6 yuan (tax included) for every 10 shares, with a dividend rate of 70.1%.
The company released its 2024 quarterly report: 24Q1 achieved total operating revenue of 16.255 billion yuan, +8.0% year on year, and net profit to mother of 6.055 billion yuan, +5.0% year on year.
Revenue from ordinary alcohol is growing rapidly, and nationwide expansion continues to gain strength. By product: In '23, the company's liquor revenue was +10.4% (volume -14.9%, price +29.8%); among them, the revenue from medium to high-end liquor was +8.8%, and the revenue from ordinary alcohol was +20.7%. We think or benefit from the rapid growth of the Shuanggou brand. By region: Alcohol revenue within the province/outside the province was +8.0%/+11.9%, respectively. Revenue from outside the province accounted for +0.86pct to 55.7% year-on-year, and nationwide expansion continued to advance. Channel division: Revenue from wholesale distribution/online direct sales channels in '23 was +10.1%/+11.3%, respectively. The company continued to expand the national market, with a net increase of 328 to 8,789 23H2 dealers (-25/+353 in and outside the province respectively). In '24, the company will focus on the goal of “deepening the base business and deepening nationalization”, promote channel sinking and refined operation, and use digital marketing tools to develop targeted sales strategies.
24Q1 gross margin was under pressure, and cash flow performance was good. The gross margin for 23 years was +0.64pct to 75.2% year on year. Among them, the gross margin of medium and high-end alcohol was -0.03pct to 80.3% year over year, and the gross margin of ordinary alcohol increased significantly, +8.60pct to 46.2% year over year. 24Q1 gross margin -0.56pct YoY to 76.0%. The company's cash flow performance was good, with 23Q4+24Q1 sales payback/operating net cash flow +13.0%/+10.5%, respectively.
Taxes and surcharges, irregular fluctuations in profit and loss, and increased investment have dragged down profits. The net interest rate for the year 23 was -0.92 pct to 30.2% year over year, mainly affected by: 1) sales expenses ratio +2.38 pct to 16.3% year over year, mainly due to advertising and promotion expenses rate +2.43 pct year over year, 2) fluctuations in tax and additional rates, +1.33 pct to 15.9% year over year, and 3) investment income -40.0% year over year to 256 million yuan. Expenses were -0.35pct to 10.3% year-on-year during the 24Q1 period, with sales/management/R&D expenditure rates of +1.11pct/-0.89pct/-0.33pct to 8.5%/2.8%/0.1%, respectively. The net profit margin for 24Q1 was -1.07pct year-on-year to 37.3%.
Profit forecasting and investment advice. We expect the company's 2024-2026 EPS to be 7.31, 8.08, and 8.87 yuan/share, respectively. Referring to comparable company valuations, the company was given 16-20 times P/E in 2024, with a corresponding reasonable value range of 116.97-146.22 yuan, maintaining a “superior to the market” rating.
Risk warning. Product upgrades fell short of expectations, and nationwide expansion fell short of expectations.