Incident: In 2023, the company's revenue/net profit to mother was $245.627 billion (-4.10%/-9.21% YoY), of which 23Q4's revenue/net profit to mother was $59.09/1.298 billion yuan (-9.30%/-15.20% YoY); 24Q1's revenue/net profit to mother was $76.94/19.19 billion, respectively (+10.21%/+11.85%).
After 23 years of overall pressure, growth resumed in 24Q1. Volume and price of major products declined in 2023. Among them, soy sauce business revenue was 126.37 (-8.83% YoY), with sales volume/tonnage price changing -8.17%/-0.72% to 2.298,200 tons and 5498.74 yuan/ton, respectively; oyster sauce business revenue was 42.51 (-3.74% YoY), and sales/tonnage prices changed -1.92%/-1.86% yoy to 8611,000 tonnes and 4937.10 yuan/ton; sauce business revenue was 24.27 (-6.08% YoY), and sales/tonnage, respectively. -0.41%/-5.69% to 283,500 tons and 8559.48 yuan/ton. 23Q4 Soy Sauce/Oyster Sauce/Sauce/Other Revenue YoY -12.93%/-14.62%/-7.40%/+17.84%. 24Q1 soy sauce/sauce/oyster sauce/other revenue was +10.06%/+6.44%/+9.63%/+22.10%. 24Q1 major products all achieved growth, with significant increases in other categories.
Online growth was significant in 24Q1, and the average dealer quality improved. Revenue in East/South/Central/North/West in 2023 was 43.54/45.00/50.49/59.25/2,986 billion yuan (-7.26%/-2.17%/-4.78%/-0.68%), with a slight decline in revenue in major regions; 24Q1 was +10.33%/+21.81%/+10.21%/+6.46%/+10.08%, respectively, with the exception of the central region. In 2023, offline/online revenue was 219.26/ 889 million yuan (-3.86%/-10.06% YoY); 24Q1 offline/online was +10.81%/+20.67%, respectively, with significant online growth. In 2023, the net number of dealers was 581 to 6591; the net addition of 2024Q1 dealers was 85 to 6506, and the average dealer revenue was +17.38% year-on-year to 1,112 million yuan/household.
24Q1 Profitability increased, and overall costs were stable. In 2023, the company's gross margin/net margin changed by -0.95/-1.25 percentage points to 34.74%/22.97%, respectively; sales expense ratio/management expense ratio changed -0.06/0.42 percentage points year-on-year to 5.32%/2.14%, respectively. The gross margin/net margin of the 24Q1 company changed by 0.38/0.37 percentage points to 37.31%/25.06%, respectively, and both gross margin and net margin increased; sales expense ratio/management expense ratio changed +0.27/0.00 percentage points year over year to 5.50%/1.61%, respectively, and cost investment increased.
Investment advice: In 2024, the company will adhere to the quality engineering policy, improve products, expand categories, revitalize channels, and expand brands to open up development space and opportunities. Since the current environment is still full of opportunities and challenges, according to the company's 24Q1 performance, we slightly adjusted our profit forecast. We expect 24-26 revenue to be 270.70/295.96/32.303 billion yuan, respectively (24-25 years ago value was 302/33.9 billion yuan), with a growth rate of 10%/9%/9%, and net profit to mother of 61.08/65.85/71.07 (75.86 billion yuan 24-25 years ago). The growth rate is 9%/8%, corresponding to PE 36/33/31X, maintaining the “buy” evaluation grade.
Risk warning: Industry competition intensifies; consumer demand falls short of expectations; channel expansion falls short of expectations; risk of fluctuating raw material prices.