Significant increase in profitability and continuous optimization of product structure
The company's total revenue for 2023/2023Q4/2024Q1 was 21.01/486/576 billion yuan respectively, up 24%/29%/26% respectively, mainly due to the significant increase in the main MSG business. Net profit to mother was 130.30/0.35/0.49 million yuan, respectively, up 181% /2023Q4 to -03 billion yuan/135%. On the profit side, the company's gross margin for 2023/2024Q1 was 17.15%/24.49%, respectively, with an increase of 3 pct/9pct, respectively. It is expected to be mainly due to high-margin monosodium glutamate, chicken essence and other compound product structures, and progress in the superimposed computing power leasing business; the company used domestic goods opportunities to increase online platform fee investment, and 2023/2024Q1 sales expenses increased by 1 pct/2 pct to 5.02%/6.96%, respectively. The management expenses ratio was 3.59%/4.62%, respectively. /+1pct, resulting in the 2023/2024Q1 net interest rate of 6.22%/8.78% respectively, increasing by 3 pct/4 pct, respectively, and profitability continued to improve. In the 2024 business plan, the company thoroughly implemented the “521 Brand Revitalization Strategy” and aims to achieve revenue of 3.3 billion yuan and operating profit of 350 million yuan in 2024.
The large-scale expansion of monosodium glutamate with high quality, and the computing power business contributed to performance
The results of the sinking of the MSG channel in 2023 were shown. In 2023, the company's revenue of MSG, chicken essence and other products was 16.23/2.57/1.09/0.29/0.14/0.10/0.56 billion yuan, respectively, +26%/+36%/-33%/-13%/+485%/+105%/+492%, respectively. The sales volume of MSG and chicken essence in 2023 was 15.86/263 million tons, respectively, up 32%/29%, respectively. 1.02 million yuan/ton (same decrease of 4%). The main channel of monosodium glutamate has achieved remarkable results. Sales have increased significantly. The structure of remixed products such as chicken essence continues to be optimized. At the same time, the company promoted the construction of the second phase of the Lotus Health Condiment Industrial Park project to consolidate the competitive advantage of the main business. The computing power business initially showed an increase after the official layout in 2023Q4. In 2023, it achieved revenue of 101 million yuan and a gross profit margin of 59%. Profitability was significantly superior to the main business. The 2024Q1 main business performed steadily, and the revenue contribution of the computing power business accelerated. In 2024Q1, the revenue of MSG, chicken essence, flour, organic fertilizer, water industry, liquid condiments, and other products was 4.54/0.63/0.29/0.07/0.04/0.04/0.06 billion yuan, respectively, +28%/+1%/+1%/+417%/-10%, respectively. The computing power business achieved a revenue of 0.09 billion yuan. The main MSG industry continued its high growth trend. Domestic channels were sinking and nationalized, and overseas flavor power projects. Continued progress. It is expected that after the implementation of the project, it will provide a new channel for export sales of monosodium glutamate; achieve high growth in liquid condiments under a low base; the revenue contribution of the computing power leasing business will accelerate. In the future, the company will take advantage of comprehensive resource advantages through mergers, acquisitions, restructuring and integration, etc., and the second growth curve will gradually gain strength.
Online business continues to accelerate, and the nationwide layout is progressing steadily
The basic offline business market was consolidated, and the online business continued to accelerate. In 2023, the company's online/offline channel revenue was 0.76/ 2.022 billion yuan respectively, up 317%/21% respectively, and 2024Q1 revenue was 0.31/545 million yuan, up 324%/22% respectively. The company accelerated promotion through online channels such as Douyin, and the main MSG business/water industry continued to expand on e-commerce platforms. The effect of the nationwide layout is evident. The revenue for North China/ East China/ South China/ West China/ Central China/ Overseas in 2023 was
1.55/2.83/3.28/3.23/7.02/308 million yuan, respectively +26%/+99%/-18%/+30%/+48%, 2024Q1 revenue was 0.53/0.77/0.90/0.85/2.11/0.60/576 billion yuan, respectively, up 58%/26%/16%/12%/43%/1%/26%, respectively. The company strengthened its regional layout outside the central China core market. The results of developing weak markets such as 2024Q1 in North China were evident. Help the company's nationalized and balanced development.
Profit forecasting
Our company continues to carry out internal reforms, resolve historical burdens, and actively explore a second growth curve. As internal cost reduction and efficiency results continue to be released, profit growth potential is expected to continue further. According to the annual report and quarterly report, EPS for 2024-2026 is expected to be 0.16/0.25/0.38 yuan, respectively, and the current stock price is 22/14/9 times PE, respectively, maintaining a “buy” investment rating.
Risk warning
Downside macroeconomic risks, food safety risks, growth in main business falling short of expectations, falling short of expectations in computing power business, risk of rising costs, etc.