Incident: The company released its 2023 annual report and 2024 quarterly report. In 2023, it achieved operating income of 31.93 billion yuan, +21.8% year-on-year; net profit to mother was 10.44 billion yuan, +28.9% year-on-year. In the first quarter of 2024, revenue was 15.34 billion yuan, +20.9% year-on-year; net profit to mother was 6.26 billion yuan, +30.0% year-on-year.
The blue and white series+BOFEN increased at the same time. In 2023, the company achieved revenue of 20.0/8.54 billion yuan respectively, or +22.6%/20.1% year-on-year. Among them, the Blue and White series achieved revenue of about 146 yuan (revenue exceeding 10 billion dollars in 2022), increasing its share of revenue to 46%. The sales volume of blue and white products such as blue and white 20 and 25 led to sales volume/tonne price of medium and high price alcohol, respectively, +11.3%/10.1%, and gross margin of +0.11pct.
The volume of the Bofen series Q4 was slightly controlled, and there was steady growth throughout the year.
Regional development is progressing rapidly. Looking at the subregion, the company achieved revenue of 120.8/19.66 billion yuan in 2023, respectively, and +23.7%/21.6% year-on-year respectively. The number of dealers was +52/251, respectively.
The company's 1 billion yuan market continued to grow, and the core market south of the Yangtze River increased by more than 30% over the same period last year.
Expenses have been accurately invested, and the net interest rate level has been raised. The company's gross profit margin in 2023 was 75.3%, -0.1 pct year on year; management expense ratio/sales expense ratio was 3.8%/10.1%, respectively, -2.9/+0.9 pct year on year.
The gross profit margin for single 4Q23 was 72.1%, +3.0pct year on year, mainly benefiting from structural optimization driven by blue and white series volume; management expense ratio/sales expense ratio were 6.4%/13.3%, respectively, -3.6/+4.7pct year on year.
1Q24 gross profit margin was 77.5%, +1.9pct year on year, management fees/sales expenses were 2.0%/7.5%, respectively, -0.1/-0.5pct year on year. Net interest rates for the first quarter of 2023 and 2024 were 32.7% and 40.8% respectively, +1.8% and +2.8% year-on-year. 2023 is the first year of the company's fee reform. In September, the “Fen Enjoy Rewards” model began to be implemented to distribute expenses in a hierarchical and accurate manner, driving the company's net profit level to increase and further improve profitability.
The dividend ratio has been rising steadily. The company paid 5.33 billion yuan in 2023, with a dividend ratio of 51%, a slight increase over last year's dividend ratio. The dividend ratio is 1.6% based on the latest closing price.
Investment advice: Based on the latest performance, the profit forecast is slightly raised, the 2024/2025 EPS is expected to be 10.78/13.26 yuan, and an additional 2026 EPS forecast is 15.99 yuan. The 2024/4/30 closing price of 262.31 yuan corresponds to a P/E of 24/20/16 times, respectively. The company's performance growth is highly deterministic and maintains a “recommended” rating.
Risk warning: Risk of market development falling short of expectations; risk of increased competition.