Introduction to this report:
The company's high-quality customer resources, comprehensive packaging solutions and differentiation strategies are constantly being enhanced, and its own product categories continue to be introduced, which is expected to usher in steady growth in performance along with the recovery of the consumer scenario.
Key points of investment:
Investment advice: The company is a leader in the domestic metal packaging field. It has cooperated steadily with high-quality leading customers, raised the 2024-2025 EPS forecast to 0.37/0.42 yuan (originally 0.33/0.36 yuan), added the 2026 EPS forecast to 0.45 yuan, maintained a target price of 6.04 yuan, and maintained an “gain” rating.
Revenue was generally flat, and profit growth was impressive. The company achieved revenue of 13.843 billion yuan/ -1.59% in 2023, but the profit side achieved steady growth. In 2023, the company achieved net profit of 775 million yuan/ +37.05%, gross profit margin 15.24% /+3.38pct, and net profit margin 5.34% /+1.39pct.
Cost reduction and efficiency have been steadily promoted, and profit levels have increased markedly. The company's three-piece can business grew steadily, and the sales volume and profit level of the two-piece can business improved year on year, driving the company's profits to improve. The company is the first in the industry to adopt a “follow-up” production layout model. Through “symbiotic production layout” and “close production layout”, the company is closely spatially dependent on core customers to minimize product and packaging transportation costs and increase profit margins. The company can provide FMCG customers with the best overall integrated packaging solutions, and is in a leading position in China in terms of business scale, customer structure, and innovation ability. In 2023, the operating costs of the company's metal packaging products and services decreased by 7.59 pct year-on-year, fully reflecting the significant cost reduction results.
Actively promote asset restructuring and enhance long-term competitiveness. The company is planning to acquire all issued shares of COFCO Packaging in cash. As of May 23, 2024, the company indirectly holds 24.40% of COFCO Packaging's shares. It is expected that after the transaction is completed, it will obtain control of COFCO Packaging, which can further enhance the company's long-term profitability, strengthen the competitiveness of the industry and customer service capabilities.
Risk warning: raw material prices fluctuate greatly; major customers are dependent on risk.