Revenue for 2023 increased 15% year over year, and revenue for the first quarter of 2024 increased 18% year over year. The company achieved revenue of 14.045 billion yuan in 2023, up 15.29% year on year; net profit to mother was 1,478 billion yuan, up 34.24% year on year. In the first quarter of 2024, the company achieved revenue of 3.755 billion yuan, up 17.67% year on year; net profit to mother was 438 million yuan, up 21.24% year on year.
Revenue from surimi products grew well in the first quarter of 2024, and the dominant dealer channel showed steady performance. By product, revenue from rice and noodle products/surimi products/meat products/dish products increased by 5.4%/11.8%/10.2%/29.8%, respectively, year-on-year in 2023. The sales growth trend of Marunoson and Sukiyaki is relatively good; among frozen dishes, shrimp paste products are performing well. By channel, distributor/supermarket/e-commerce and new retail channel revenue was +16.0%/-13.4%/+28.9%/+145.9%/-0.3% year-on-year in 2023. The performance of the company's dominant dealer channels was relatively steady. By the end of the first quarter, the number of dealers reached 1993; the e-commerce channel growth rate was obvious due to the development of new media channels; the supermarket channel was seriously affected by the decline in passenger traffic.
Product structure optimization has led to an increase in gross sales margin, and profitability continues to improve. The company's gross margin increased by 1.3 pct to 23.2% year on year in 2023, mainly due to falling raw material prices and a continuous increase in the share of high-margin fresh-packed products. The gross margin of frozen surimi products increased 2.7 pct year on year in 2023. The company's expense ratio has been declining steadily. In 2023, the sales/management/ R&D expense ratio was 6.6%/2.7%/0.7%, -0.6/-0.1/-0.1pct year-on-year. In the first quarter of 2024, the company's gross margin increased by 1.8 pct to 26.6% year on year, and the gross sales margin increased to 19.1%, and 1.8/0.8 pct year over month. On this basis, the net profit margin to mother increased 0.4 pct to 11.7% year on year, reaching the highest profit margin in a single quarter in recent years.
Increase the dividend rate to give back to shareholders, with a dividend rate of 53.17% in 2023. Since its listing, the company promised a dividend rate of 20%. The actual annual dividend rate was about 30%, and the minimum dividend rate in the 24-26 shareholder return plan was raised to 40%. The company actively gives back to investors. According to the profit distribution plan, the company plans to distribute 519 million yuan in cash dividends (including tax) to shareholders, considering mid-term dividends, annual dividends and early repurchases. The dividend rate in 2023 will reach 53.17%.
Risk warning: Product promotion results are poor, industry competition is intensifying, raw material prices have risen sharply, etc.
Investment advice: Considering the moderate recovery of downstream restaurants in 2024, we slightly lowered our previous profit forecast. The company achieved total operating revenue of 160.1/180.9/20.06 billion yuan in 2024-2026 (the previous forecast value was 174.0/20.31 billion yuan), 14.0%/13.0%/10.9% YoY; in 2024-2026, the company achieved net profit of 17.0/19.0/2.04 billion yuan (the previous forecast value was 2024-2025 profit) 17.6/2.14 billion yuan), 14.8%/12.2%/7.0% year-on-year; the company is expected to achieve EPS of about 5.79/6.49/6.95 yuan in 2024-2026, and the current stock price corresponding to PE is 16.7/14.9/13.9 times, respectively. The company has strong product creation capabilities, resilient management of superior distribution channels, and maintains a “superior to the market” rating.