The company released its 2023 annual report and 2024 quarterly report: in 2023, the company achieved operating income of 1,337 million yuan, a year-on-year decrease of 11.80%; realized net profit of 103 million yuan, a year-on-year decrease of 31.41%; realized net profit after deduction of 109 million yuan, a year-on-year decrease of 4.33%. 2023Q4 achieved revenue of 351 million yuan, a year-on-year decrease of 6.50%; realized net profit of 0.16 million yuan, a year-on-year decrease of 33.17%; and realized net profit of 25 million yuan after deduction, an increase of 24.58% over the previous year. 2024Q1 achieved revenue of 384 million yuan, an increase of 35.18% over the previous year; realized net profit of 42 million yuan, turning a loss into a profit; and realized net profit of 36 million yuan after deduction, turning a loss into a profit.
The non-woven fabric business grew significantly, driven by the release of production capacity: 1) Pet disposable hygiene care products: achieved revenue of 1,253 billion yuan in 2023, a year-on-year decrease of 13.31%. 2) Personal disposable hygiene products:
Revenue of $18 billion was achieved in 2023, up 4.37% year over year. 3) Non-woven fabrics: Achieved revenue of 62 million yuan in 2023, an increase of 18.92% over the previous year. 4) Other businesses: Achieved revenue of $0.04 billion in 2023, an increase of 180.44% year-on-year. In 2024, with the release of the company's fund-raising project production capacity, the company's product supply guarantee capacity was further enhanced. The company will continue to consolidate its advantages in customer resources, large-scale production, product R&D and design, product quality and fine management, and consolidate and expand the market share corresponding to the original customer resources.
Overseas orders gradually recovered, and domestic revenue increased significantly: 1) Overseas: Achieved revenue of 1,242 billion yuan in 2023, a year-on-year decrease of 13.86%. The decline in overseas revenue is mainly affected by the inventory removal cycle of some overseas customers. As the customer's inventory removal cycle ended, orders gradually recovered, and some customers maintained good growth. 2) Domestic: Revenue of $95 million was achieved in 2023, an increase of 27.83% year-on-year.
The company should use direct sales and distribution methods to sell domestically, expand many domestic pet brand operators through ODM/OEM, and continue to sell the company's own brands of “Duo Bang”, “Love Dream Garden” nursing pads, “Yi Yi” sanitary napkins and pads, etc., to help increase revenue in the domestic market.
Profit forecast and rating: We expect the company's net profit for 2024-2026 to be 1.48, 1.81, and 214 million yuan, respectively, +43.6%, +22.2%, and +18.2%. The current closing price corresponds to 2024-2025 PE, which is 18 or 15 times. As a leading enterprise in the nursing field, the company is rated 24 to 25 times PE in 2024, corresponding to a reasonable value range of 19.24 to 20.05 yuan.
Risk warning: Raw material prices fell short of expectations, market competition intensified, and downstream customer orders fell short of expectations.