Description of the event
The company's total revenue in 2023 was RMB 31.928 billion (+21.8% YoY); Net Profit to Mother of RMB 10.438 billion (YoY +28.93%); Total 2024Q1 Revenue of RMB 15.338 billion (YoY +20.94%); Net Profit to Mother of RMB 6.262 billion (YoY +29.95%).
Incident comments
The blue and white series led the growth, and the product structure continued to improve. In 2023, the company's blue and white series continued to grow faster than the company as a whole. The blue and white series accounted for about 46% of the company's revenue, and the revenue scale exceeded 14 billion yuan. In 2023, the sales volume of liquor was 205,800 thousand kiloliters (+16.3%), of which 60,000 kiloliters (+11.3%) of high-priced alcoholic beverages and 145,800 thousand kiloliters (+18.49%) of other alcoholic beverages; in 2023, the tonnage price of liquor was 154,300 yuan/kiloliters (+4.81%); in 2023, the company continued to rise in volume and price, with high-end products performing better.
Nationalization is progressing steadily, and the growth rate south of the Yangtze River is relatively rapid. In 2023, domestic market revenue of 12.084 billion yuan (YoY +20.41%), single Q4 -7.45%, 2024Q1 domestic market revenue of 5.597 billion yuan (YoY +11.44%); 2023 foreign market revenue of 19.659 billion yuan (YoY +22.84%), single Q4 +49.14% YoY, 2024Q1 non-provincial market revenue of 9.7 billion yuan (YoY +27.61%); the growth rate of the market outside the province continued to grow faster than the provincial market, with a volume of 1 billion yuan. Revenue from the core market south of the Yangtze River increased by more than 30% year on year, and the nationalization process was further expanded.
The performance of contract liabilities and cash flow was comparable, and the company's repayment situation was relatively good. The company's total revenue +△ contract liabilities in 2023 was 32,049 billion yuan (+24.48% year over year), and the company's 2024Q1 operating revenue+△ contract liabilities were 13.899 billion yuan (+39.74% year over year). The company's cash flow from sales of goods and services was $30.131 billion (+4.94% YoY) in 2023, and $14.202 billion (+44.66% YoY) in 2024Q1. Looking at 2023Q4+2024Q1, the company's total operating income +△ contract liabilities +29% year over year, and sales revenue +25% year over year, still maintaining impressive performance.
Profitability has steadily increased, and expense rates have remained stable. The company's net profit margin in 2023 was +1.81 pct year on year to 32.69%, gross margin was -0.05 pct year on year to 75.31% year on year, and the cost ratio for the period was -3.61 pct to 14.09% year on year. The company's 2024Q1 net profit margin was +2.83 pct to 40.83% year on year, gross margin was +1.9 pct year on year, and the period expense ratio was -0.55pct to 9.62% year over year, with detailed changes: sales expense ratio (-0.48 pct year over year), management fee rate (-0.09 pct year over year), financial expense ratio (+0.02 pct year over year), operating tax and surcharges (-1.05 pct year over year). Considering that fees are left behind under the company's preferential treatment model, the company's fee rate fluctuates to a certain extent between quarters, but it remains stable in the long run.
The dividend rate has been rising steadily. The company expects to pay a total cash dividend of 5.33 billion yuan. The company's cash dividend this year accounts for 51.07% of net profit returned to mother for the year. The dividend ratio continues to increase compared with 50.03% in 2022 and 41.33% in 2021.
The company's long-term development logic is stable and maintains a “buy” rating. Looking at the medium to long term, the advantages of Bofen's big single products have not changed. Blue and White 20 has established an advantage in the sub-high-end, and the Blue and White 30 growth model has returned to positive. While establishing a good market base around the Shanxi market, the company is one of the few brands that can buck the trend and expand its share in weak regions, and its brand potential in the market south of the Yangtze River continues to grow.
We expect EPS to be 10.91/13.22 yuan in 24/25, and the corresponding PE will be 23/19 times, respectively, maintaining the “buy” rating.
Risk warning
1. Industry demand falls short of expectations;
2. Increased market price fluctuations, etc.