On the evening of March 21, Weilong Meishui (9985.HK) announced its 2023 annual results. Thanks to active innovation and omni-channel construction layout, the overall revenue reached 4.87 billion yuan (RMB, same below), an increase of 5.2% over last year. Weilong's net profit in 2023 increased 481.9% to 880 million yuan. Adjusted net profit reached 970 million yuan, up 6.3% year on year. The adjusted net profit margin increased from 19.7% in the same period last year to 19.9%, and the basic profit per share was about 0.38 yuan.
Based on the overall improvement in business, Weilong's board of directors proposed a final 2023 dividend of RMB 0.10 per common share (tax included, same below). The annual dividend, including the interim dividend, is approximately 60% of the 2023 net profit. Also, considering 2024 as the first anniversary of listing, it is proposed to pay a special dividend of RMB 0.11 per common share, which is approximately 30% of the 2023 net profit. The final dividend and special interest mentioned above will not be implemented until approved by Weilong Mei's Annual General Meeting of Shareholders. Combined with the interim dividend, final dividend and special interest on the first year of listing, Weilong Delicious's annual dividend payout ratio was as high as 90%. Based on the closing price of Weilong Delicious on March 21 (HK$5.8), the dividend rate was about 6.18%.
According to the report, current changes in consumer demand and channels in the snack food industry are showing a trend of diversification and diversification. As a leader in the spicy snack food industry in China, Weilong Meals actively embraces change, adheres to the “multi-category big single product” product strategy; continues to strengthen omnichannel construction to embrace new opportunities in emerging channels; and continuously enhances brand influence through younger brand building.
On the product side, thanks to the restructuring of major products in the previous year, and the decline in raw material prices this year, Weilong Food continued to optimize production processes and cost management. During the year, gross profit increased 18.5% year-on-year to 2.32 billion yuan, and gross margin increased to 47.7%.
At the same time, Weilong Gourmet further explores and innovates a rich product matrix, explores more consumer needs through consumer insight, and continues to expand its product line in line with consumer preferences. Through solid and in-depth basic research and leading production process technology, Weilong has launched a variety of innovative spicy snack foods, “Overbearing Panda”, konjac belly “Little Witch”, and spicy chips “Crispy Fire”.
In terms of channels, after years of intensive omni-channel construction, Weilong Delicious already has a distribution network that has penetrated the national market. In 2023, while further consolidating traditional distribution channels, the company actively embraces emerging channels such as O2O, snack volume sales channels, and content e-commerce. The company has reached close cooperation with major snack sales systems, and actively lays out major e-commerce platforms to keep up with the changing traffic trends of online platforms and achieve full-platform e-commerce channel coverage. Online and offline channels complement each other strongly, and continue to deepen omni-channel construction.
Weilong Food actively strengthens brand building and interacts with young consumer groups through novel, interesting and topical activities to seize consumers' interests and create communicative topics, thereby increasing the Group's brand exposure and popularity. At the same time, the Group also pays attention to the “cultural core” of the brand, actively participates in brand charity activities, fulfills social responsibilities, and comprehensively enhances the Group's brand image.
In 2024, cost effectiveness, rationality, diversification and personalization will gradually become mainstream consumption concepts for young consumers. In addition, supply-side and demand-side changes in the snack food industry are accelerating the reshaping of snack food channels. In response, Weilong said it will continue to deepen online and offline omnichannel construction and development, actively embrace the development dividends of new channel changes, increase investment in products, R&D and supply chains, better meet the needs of customers and terminal markets, and seize more opportunities in a challenging environment.