Incident 1: On the evening of April 22, the company released its 23-year annual report, achieving annual revenue of 4.98 billion yuan, +19.0% year over year; net profit to mother of 780 million yuan, +25.5% year over year; deducted non-net profit of 740 million yuan, +23.1% year over year. 23Q4 revenue was 1.31 billion yuan, +9.2% year over year; net profit to mother was 160 million yuan, +30.8% year over year; net profit after deduction of non-return to mother was 150 million yuan, +24.7% year over year.
Incident 2: The company released its quarterly report for '24. In 24Q1, it achieved revenue of 1.27 billion yuan, +2.5% year over year; net profit to mother of 220 million yuan, +32.6% year over year; net profit after deducting non-return to mother of 210 million yuan, +36.1% year over year.
Borosilicate upgrades contributed to revenue growth, and export performance was impressive. In 2023, the company's revenue for molded bottles, brown bottles, controlled bottles, ampoules, butyl rubber stoppers, and aluminum-plastic bottle products was +29.4%, +18.1%, +24.4%, +12.7%, and -2.7% year-on-year; by region, the company's domestic and overseas revenue were +17.1% and +26.4%, respectively. We expect the company's main products to grow rapidly in revenue, such as molded bottles and brown bottles, and the company's active expansion of overseas markets. On a quarterly basis, the year-on-year growth rates of the company's 23Q1-24Q1 revenue were +18.7%, +26.9%, +23.6%, +9.2%, and +2.5%, respectively. We expect the 23Q4 revenue growth slowdown to be mainly affected by the high base of the previous period, while the 24Q1 revenue growth slowdown was mainly affected by seasonal fluctuations in revenue from non-main packaging and trading subsidiaries.
The 23Q4 fee accrual had a phased impact, and 24Q1 profit increased significantly. In '23, the company's glass bottle products achieved gross profit margins of 39.2%, 23.8%, -1.7%, and 5.7%, respectively, compared to -0.6 pcts, +3.0 pcts, -11.2pcts, and -2.0pcts, respectively. Among them, the main general-molded (molded bottles, brown bottles) products maintained a high level of profit under an excellent competitive pattern due to increased competition. On a quarterly basis, the consolidated gross margin of 23Q1-24Q1 companies in a single quarter was 23.7%, 30.3%, 30.7%, 27.5%, and 30.6%, respectively. We expect the month-on-quarter decline in 23Q4 to be mainly affected by cost fluctuations and repair cost calculations. In 2023, the company's annual expense ratio was 8.8%, +0.4 pcts year on year; net interest rate was 15.6%, +0.8 pcts year on year. Entering 24Q1, the company accelerated the release of borosilicate molded bottles, and the cost of superimposed raw materials decreased. The comprehensive gross margin was +6.9 pcts and +3.1 pcts, respectively, compared with the same period last month, with significant profit improvements. Due to the calculation of the incentive fund, the 24q1 company's expense ratio was +1.5pcts to 8.9% year on year; the net interest rate was 17.4%, +4.0pct year over year.
Cash flow has improved markedly, and operating standards have improved. In '23, the company achieved a net cash flow of 1.05 billion yuan from operating activities, a significant improvement over 250 million in the same period last year; annual revenue ratio of 0.95, +0.06 year on year; net current ratio of 1.35, +0.94 year on year. In terms of operating capacity, the company's inventory turnover rate for the full year of '23 was 3.2 times, +0.2 times year on year; accounts receivable turnover ratio was 5.41 times, +0.3 times year on year. The operating level increased, reflecting the overall improvement in operating quality.
Investment advice: The company's molded bottle leader is in a stable position, fully benefiting from product upgrades to achieve steady growth, compounding the downward cost center, and the release of profit flexibility can be expected. We expect the company to achieve revenue of 58.1/64.8/7.15 billion in 24-26 (55.4/6.31 billion in 24-25), and is expected to achieve net profit of 10.2/12.1/1.38 billion (previously 24-25 years 96/1.13 billion), corresponding to the current PE price of 18/15/13, maintaining a “buy” rating.
Risk warning: Risk that project construction falls short of expectations, collection progress falls short of expectations, fluctuations in raw fuel prices exceed expectations, increased competition exceeds expectations, and information on the use of research reports is delayed or not updated in a timely manner