上半年公司收入增长主要系产品销量增加带动，23H1 公司的鸡肉调理品、生鲜品、毛鸡销量分别同比增加了11%、35%、19%。而成本费用则对公司盈利形成了明显的拖累。成本方面，上半年饲料原料价格整体维持高位震荡、公司鸡苗采购成本同比上涨110%、年宰杀5000 只肉鸡智慧工厂于2022年投产但今年上半年尚未达产等因素导致单位成本增加，公司整体毛利率下滑约2.1 pct。费用方面，公司上半年期间费用率同比提升约0.65 pct。其中，为配合生产规模的增长，以及公司未来发展的需要，公司新设子公司并招聘人员，导致管理费用和销售费用分别同比增长16%和32%；公司持续加大新品研发力度，研发费用同比增长了64%；生产规模扩大所需营运资金增加，导致公司银行融资规模增大，财务费用同比增加。2023H1 achieved net profit of 13.73 million yuan, -68% year-on-year
The company released the 2023 semi-annual report. 2023H1 achieved revenue of 1,377 million yuan, +23% year-on-year, and net profit of 13.73 million yuan, or -68% year-on-year. Among them, 23Q2 achieved operating income of 688 million yuan, +7.92% year-on-year and -0.14% month-on-month; realized net profit of 5.39 million yuan, -83% year-on-year and -37% month-on-month. We maintain our profit forecast. We expect the company to record net profit of 0.82/226/315 million yuan respectively in 2023/24/25, corresponding to EPS of 0.41/1.13/1.57 yuan, respectively. Referring to the comparable company Wind's unanimous expectation of 11x PE in 2024, considering that Chunxue Food's condiment business is relatively large, and that its profit level and stability may be superior to traditional white feather chicken breeding companies, we gave Chunxue Foods 15 times PE profit in 2024, corresponding to a target price of 16.95 yuan, maintaining the “buy” rating.
Increased sales volume boosts revenue, and costs drag down profits
The company's revenue growth in the first half of the year was mainly driven by an increase in product sales. 23H1's sales of chicken condiments, fresh products, and chicken products increased by 11%, 35%, and 19% year-on-year, respectively. Costs and expenses, on the other hand, have clearly dragged down the company's profits. In terms of cost, the overall price of feed ingredients remained high and fluctuated in the first half of the year, the company's purchase cost of chicken seedlings rose 110% year-on-year, and the smart factory that slaughtered 5,000 broilers a year was put into operation in 2022 but production has not yet been achieved in the first half of this year, leading to an increase in unit costs. The company's overall gross margin fell by about 2.1 pct. In terms of expenses, the company's cost rate increased by about 0.65 pct over the same period last year during the first half of the year. Among them, in order to meet the growth in production scale and the needs of the company's future development, the company set up new subsidiaries and recruited personnel, which led to a year-on-year increase in management expenses and sales expenses of 16% and 32% respectively; the company continued to increase research and development efforts for new products, and R&D expenses increased by 64%; the increase in working capital required to expand production scale led to an increase in the company's bank financing scale and a year-on-year increase in financial expenses.
Continuously promote brand building, and fundraising projects are progressing smoothly
On the brand side, the company seized the opportunity for JD to include Chunxue Foods in 20 strategic support categories that sold over 100 million yuan, participated deeply in the JD 618 campaign, and continued to win the first place in fresh chicken sales; as of the 2023 interim report, the “Fresh” and “Chunxue” brands had more than 27.33 million followers in JD; during this year's new product launch, it collaborated deeply with Sina Weibo, and had a total reading volume of over 3 billion dollars during the cooperation period. “Check in on the three topics of “Check in on the real flavor of prepared food, release of new products released in 2023, and tasty recipes for lazy people” The list is popular all over the internet. In terms of products, the company continued to launch new products, create, and expand the market. In May of this year, the company launched 16 new products, 8 distinctive regional cuisines, and formed 4 popular products that sold over 100 tons per month. In terms of production capacity, the company expects the “smart factory construction project with an annual output of 40,000 tons of chicken condiments” to be put into operation at the end of September. At that time, the bottleneck in condiment production capacity is expected to be alleviated.
The target price is 16.95 yuan, maintaining the “buy” rating
We expect to record net profit of 0.82, 226, and 315 million yuan respectively in 2023/24/25, corresponding to a target price of 16.95 yuan, and maintain the “buy” rating.
Risk warning: chicken price rise/cost falling short of expectations, sudden large-scale bird flu outbreaks, etc.