Incident: The company released its 2023 annual report. The full year of 2023 achieved revenue of 1.923 billion yuan, an increase of 20.47% over the previous year; net profit to mother was 278 million yuan, an increase of 36.85% over the previous year. Among them, 2023Q4 achieved revenue of 617 million yuan, an increase of 15.58% over the previous year, and realized net profit of 103 million yuan, an increase of 19.66% over the previous year.
Coconut juice repairs better, and canned fruit grows in double digits. By industry, in 2023, the company's beverage industry, canned food industry, and other industries achieved revenue of 1,143 million yuan, 758 million yuan, and 0.22 million yuan respectively, with year-on-year increases of 22.21%, 16.92%, and 74.67%, respectively. Among them, coconut juice drinks and canned fruit achieved revenue of 1.10 billion yuan and 709 million yuan respectively, up 24.37% and 17.49% year-on-year respectively; by product, 1.25L PET bottled coconut juice and 245ml blue tinned coconut juice together accounted for the company's operating revenue of coconut juice drinks 75.52%, a total increase of 24.50% year on year; canned oranges achieved revenue of 196 million yuan, up 6.65% year on year, and canned yellow peaches achieved revenue of 297 million yuan, an increase of 50.12% year on year. Together, the two accounted for 69.6% of the company's canned fruit revenue.
Reduced costs improved gross profit margins, increased investment due to terminal and channel expansion, and increased overall profitability. In 2023, the company's overall gross profit margin was 38.75%, up 5.17pct year on year. Among them, gross margins for beverages and canned food were 44.38% and 29.68% respectively, up 3.66 pct and 7.39 pct, respectively, mainly due to falling prices of packaging materials, accessories and fruit ingredients to reduce costs; on the cost side, sales expenses rate, management cost rate, and R&D expense ratio were 12.35%, 6.43%, and 0.18%, respectively, and personnel invested in terminal market maintenance, respectively. The action led to a rapid increase in the sales expense ratio; in 2023, the company's net interest rate was 14.48%, an increase of 1.74 pct over the previous year. Looking at 23Q4 alone, the company's gross profit margin was 41.08%, up 6.82 pct year on year; sales expenses ratio, management expense ratio, and R&D expense ratio were 12.46%, 5.71%, and 0.32%, respectively, up 5.26 pct, 1.08 pct, and 0.25 pct, respectively; net profit margin was 16.64%, up 0.57 pct year on year.
Key tasks in 2024 will be to maintain terminal network development, deepen channel diversification, and improve product matrices.
The first is to continue to develop terminal outlets. At the end of '24, we strive to expand to 1 million outlets, mainly in traditional advantage regions, and expand the empty market. We expect that increasing the number of terminals and marketing will help ensure the steady growth of the company's basic market; the second is channel diversification, actively embracing emerging channels such as snack franchise chains, and at the same time using the company's advantages in raw materials, supply chain management, and brand effects to carry out development work for corporate customers such as restaurants, coffee and tea shops through distribution channels, etc., and strengthen the brand's investment in e-commerce; Three is Focus on the two main products of coconut juice and canned fruit, implement the coconut juice+ product matrix series, and actively lay out the Coconut Shark Coconut Water series products.
Investment advice: Traditional coconut juice and canned fruit products are expected to achieve a steady growth rate under the market movement of additional outlets. At the same time, improve the coconut juice+ product matrix series and deepen the diversified layout of channels. The expansion of snack sales channels and B-side catering and tea customers is expected to contribute to increased performance. We predict that the company's net profit for 2024-2026 will be 3.44, 4.02, and 460 million yuan, respectively, and EPS will be 0.77, 0.90, and 1.03 yuan, respectively. The current stock price corresponding to 2024-2026 PE will be 20, 17, and 15 times, respectively, maintaining the “increase” rating.
Risk warning: Increased industry competition; channel and customer expansion falling short of expectations; sales of new products falling short of expectations; fluctuating raw material prices; food safety issues.