Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to the market [4]. Core Insights - The company reported a revenue of 2.939 billion HKD for the first half of 2024, representing a year-on-year increase of 26.3%. The net profit attributable to shareholders was 621 million HKD, up 38.9% year-on-year, aligning with market expectations [4]. - The company declared an interim dividend of 0.16 HKD per share, which accounts for approximately 60% of the net profit for the first half of the year [4]. - The company is projected to achieve net profits of 1.033 billion, 1.185 billion, and 1.354 billion HKD for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 17%, 15%, and 14% [4]. Revenue Breakdown - The revenue from the company's product segments includes 1.35 billion HKD from seasoning noodles, 1.46 billion HKD from vegetable products, and 120 million HKD from bean products and others, with year-on-year growth rates of 5%, 56.6%, and 17.5%, respectively [4][5]. - The significant growth in vegetable products is attributed to the strong performance of konjac products, particularly the newly launched sub-brand "Little Konjac," which has expanded its product offerings and distribution channels [4][5]. Profitability Metrics - The company's gross margin improved to 49.8%, an increase of 2.3 percentage points year-on-year, driven by higher capacity utilization and lower raw material costs [5]. - The net profit margin reached 21.2%, reflecting a year-on-year increase of 1.9 percentage points [5]. - The overall capacity utilization rate for the first half of 2024 was 66.5%, compared to 49.9% in the same period last year [5]. Financial Projections - The company is expected to generate revenues of 5.607 billion, 6.354 billion, and 7.232 billion HKD for 2024, 2025, and 2026, respectively, with corresponding year-on-year growth rates of 15%, 13%, and 14% [6]. - The projected earnings per share for the next three years are 0.44, 0.50, and 0.58 HKD, with a net asset return rate of 17.81%, 18.27%, and 17.46% for the same period [6].

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 2,938.6 million, an increase of 26.3% year-on-year[2]. - Gross profit for the same period was RMB 1,462.3 million, reflecting a year-on-year increase of 32.2%[2]. - The gross profit margin improved to 49.8%, up by 2.3 percentage points compared to the previous year[2]. - Profit for the period reached RMB 621.2 million, representing a year-on-year increase of 38.9%[2]. - Basic earnings per share were RMB 0.27, an increase of 42.1% year-on-year[2]. - The company declared an interim dividend of RMB 0.16 per ordinary share[2]. - For the six months ended June 30, 2024, total revenue reached RMB 2,938,649 thousand, a significant increase from RMB 2,327,279 thousand for the same period in 2023, representing a growth of approximately 26.2%[12][14][16]. - The gross profit for the six months ended June 30, 2024, was RMB 1,462,285 thousand, compared to RMB 1,106,202 thousand in the prior year, indicating a gross profit margin improvement[12][13]. - The company reported a total income tax expense of RMB 212,673,000 for the six months ended June 30, 2024, compared to RMB 157,290,000 in the same period of 2023[20]. - Net profit increased by 38.9% to RMB 621.2 million, with a net profit margin of 21.1%, up 1.9 percentage points from the previous year[34]. Assets and Liabilities - Non-current assets totaled RMB 4,998.3 million as of June 30, 2024, compared to RMB 4,178.9 million at the end of 2023[6]. - Current assets amounted to RMB 2,326.6 million, down from RMB 2,874.7 million at the end of 2023[6]. - Total liabilities increased to RMB 1,440.6 million from RMB 908.0 million at the end of 2023[7]. - Net assets attributable to the company’s owners were RMB 5,884.3 million, up from RMB 5,705.9 million at the end of 2023[7]. Revenue Breakdown - The revenue from the main product segments includes RMB 1,353,826 thousand from seasoning noodles, RMB 1,461,256 thousand from vegetable products, and RMB 123,567 thousand from bean products for the six months ended June 30, 2024[12]. - The revenue from seasoning noodle products increased by 5.0% year-on-year to RMB 1,353.8 million, accounting for 46.1% of total revenue, down from 55.4% in the previous year[38]. - The revenue from vegetable products surged by 56.6% year-on-year to RMB 1,461.3 million, representing 49.7% of total revenue, up from 40.1% in the previous year[39]. - The revenue from soybean products and other products rose by 17.5% year-on-year to RMB 123.6 million, accounting for 4.2% of total revenue, slightly down from 4.5% in the previous year[39]. Cost and Expenses - The cost of sales for the six months ended June 30, 2024, totaled RMB 1,476,364 thousand, up from RMB 1,221,077 thousand in the same period of 2023, reflecting an increase in production costs[12][13]. - Employee benefits expenses for the six months ended June 30, 2024, were RMB 540,127 thousand, a notable increase compared to RMB 51,943 thousand in the previous year[18]. - The total cost of sales, distribution, and administrative expenses amounted to RMB 2,194,122 thousand for the six months ended June 30, 2024, compared to RMB 1,807,457 thousand in the previous year[18]. - Distribution and selling expenses rose to RMB 475.5 million, a 29.5% increase from RMB 367.2 million, accounting for 16.2% of total revenue[55]. - Management expenses increased by 10.5% to RMB 242.3 million, representing 8.2% of total revenue, down from 9.4% in the previous year[56]. Market and Consumer Trends - The Chinese economy showed a GDP growth of 5.0% year-on-year in the first half of 2024, indicating a stable economic performance amidst global uncertainties[31]. - Consumer optimism regarding the macroeconomic situation increased, with 76% of respondents expressing confidence, up from 73% a year ago[31]. - The market size of the Chinese leisure food industry is projected to reach RMB 1,009.3 billion in 2024, driven by rising disposable income and innovative product launches[31]. - The company noted a shift in consumer preferences towards high-quality and diverse leisure food products, creating structural opportunities in the market[32]. - Emerging sales channels such as O2O and content e-commerce are increasingly capturing market share from traditional channels, driving innovation and market expansion in the leisure food sector[32]. Research and Development - The company continues to enhance its R&D capabilities, focusing on a "multi-category, large single product" strategy to meet diverse consumer needs[33]. - New product innovations include "Little Witch" spicy barbecue konjac strips and "Crispy Fire" green lime spicy chips, aimed at attracting younger consumers[35][36]. - The group established two application research centers in Henan and Shanghai, enhancing its R&D capabilities in food engineering and safety[1]. - The company is focusing on enhancing its research and development capabilities, with a budget allocation of HKD 90.3 million for product development activities[77]. Corporate Governance and Social Responsibility - The company emphasizes the importance of sustainable development and corporate social responsibility, integrating these concepts into daily operations and strategic planning[86]. - The company aims to enhance its governance structure and risk management, focusing on ethical standards and food safety as a core principle[86]. - The company has adhered to the corporate governance code and all applicable provisions since January 1, 2024[90]. - The company has adopted the standard code for securities transactions by directors, confirming compliance by all directors during the reporting period[91]. Future Outlook - The company aims to enhance its market presence and explore new opportunities[92]. - Future outlook and performance guidance will be a key component of the mid-term report[92].

公司研究/食品 证券研究报告 卫龙美味(9985.HK)公司研究报告 首次覆盖:中国辣味休食龙头, 盈利能力优异,第二曲线快速成长 投资要点: 中国领先辣味休食企业,盈利能力优异。公司是中国领先的辣味休闲食品企 业,根据招股说明书援引弗若斯特沙利文的资料,按 2021 年零售额计,公司 在中国所有辣味休闲食品企业中排名第一,市场份额达到 6.2%,且在调味面 制品及辣味休闲蔬菜制品细分品类的市场份额均排名第一。此外公司是中国 倍受年轻消费者喜爱的休闲食品品牌。公司营收从 2018 年的 27.52 亿元增长 至 2023 年的 48.72 亿元(CAGR=12.10%),保持稳健成长。 辣卤休食行业前景广阔,公司单品仍有较大提升空间。辣味休闲食品的零售 额由 2016 年的 1139 亿元增长至 2021 年的 1729 亿元(CAGR=8.7%),高于中 国整体休闲食品行业年复合增长率。此外辣味休闲食品在整体休闲食品行业 中的份额从 2016 年的 18.6%扩张至 2021 年的 21.0%,呈现较高景气度。公司 是中国休闲食品行业内增长最快、盈利能力最强的企业之一。对比三只松鼠 坚果 41.07 亿元、 ...

Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Views - The company is a leading spicy snack food enterprise in China, with a strong brand appeal among young consumers and a market share of 6.2% in 2021, ranking first in both seasoned noodle products and spicy vegetable snack categories [13] - The spicy snack food industry has a promising outlook, with retail sales growing from CNY 113.9 billion in 2016 to CNY 172.9 billion in 2021 (CAGR=8.7%), and the company's products still have significant room for growth [21] - The company's revenue grew from CNY 2.752 billion in 2018 to CNY 4.872 billion in 2023 (CAGR=12.10%), driven by its strong product portfolio and market position [13] Product Performance - **Seasoned Noodle Products**: Revenue grew from CNY 2.162 billion in 2018 to CNY 2.649 billion in 2023 (CAGR=3.35%), with average selling price (ASP) increasing from CNY 13.90/kg to CNY 20.49/kg [4] - **Vegetable Products**: Revenue surged from CNY 298 million in 2018 to CNY 2.119 billion in 2023 (CAGR=48.05%), driven by products like "Moyu Shuang" and "Fengchi Seaweed" [4] - **Bean Products & Others**: Revenue declined from CNY 292 million in 2018 to CNY 204 million in 2023 (CAGR=-6.93%), but ASP increased from CNY 22.41/kg to CNY 38.36/kg [30] Channel Strategy - The company's offline channel revenue accounted for 90.40% of total revenue from 2018 to 2023, with a CAGR of 11.60%, while online channel revenue grew at a CAGR of 17.09% [32] - The company has 1,708 offline distributors as of December 31, 2023, and has been actively expanding into snack vending channels, selling 433,716 boxes of products through this channel in September 2023 [36] Financial Performance - The company's gross margin increased from 34.72% in 2018 to 47.68% in 2023, driven by product mix optimization and cost management [19] - Net profit grew from CNY 476 million in 2018 to CNY 880 million in 2023 (CAGR=13.07%), with net profit margin increasing from 17.26% to 18.01% [19] Industry Outlook - The Chinese snack food market is expected to grow from CNY 825.1 billion in 2021 to CNY 1.1472 trillion in 2026 (CAGR=6.8%), with spicy snack food expected to grow at a CAGR of 9.6% during the same period [21] - The company's market share in the spicy snack food industry is 6.2%, significantly higher than its competitors, and it is one of the fastest-growing and most profitable companies in the industry [22] Valuation - The report forecasts the company's revenue to reach CNY 5.599 billion, CNY 6.367 billion, and CNY 7.136 billion in 2024-2026, with net profit of CNY 1.030 billion, CNY 1.209 billion, and CNY 1.393 billion, respectively [41] - The company is valued at a PE range of 15-19x (2024E), with a target price range of HKD 7.10-8.99 per share [41]

Product Development and Innovation - The company launched new products such as spicy Latiao "BADAO PANDA", konjac vegetarian tripe "XIAO MO NV", and spicy crisp Latiao "CUI HUO HUO" in 2023, which gained significant popularity among consumers[4] - The company started the Chinese seasoned flour products (Latiao) industry in 2001 and has since diversified into vegetable products, bean-based products, and others, such as Konjac Shuang and Fengchi Kelp[4] - The company's product portfolio includes popular items like 78° Braised Egg, which complements its core Latiao offerings[4] - The Group launched new products including "BADAO PANDA" in September, "XIAO MO NV" in October, and "CUI HUO HUO" in December, enriching its product matrix[33] - The company launched new products including spicy Latiao "BADAO PANDA", konjac vegetarian tripe "XIAO MO NV", and spicy crisp latiao "CUI HUO HUO" to diversify its product portfolio and enhance category competitiveness[49][50] - "BADAO PANDA" spicy Latiao is inspired by authentic Sichuan cuisine, reflecting the company's commitment to traditional flavors and cultural heritage[50] - "XIAO MO NV" konjac vegetarian tripe features larger, crispier slices (35x35mm) and a unique 2D brand image to appeal to young consumers[51] - The company continues to focus on innovation and a multi-category strategy to meet diversified consumer needs through consumer insights[43] Awards and Recognition - The company won over 30 awards in 2023, including "2023 Vibrant Brands Favored by College Students" and "TopBrand2023 Top 500 Chinese Brands"[5] Sales and Distribution Network - The company expanded its sales and distribution network to include supermarkets, convenience stores, traditional e-commerce, and emerging channels like content and social e-commerce, effectively reaching young consumers[6] - The company's omni-channel strategy includes traditional and emerging e-commerce platforms, ensuring wide exposure to young consumers[6] - The Group strengthened its online and offline omni-channel strategy, embracing opportunities from emerging offline snack specialty retailer channels and online content e-commerce channels[34] - The company strengthened its omni-channel operation and expansion strategies to adapt to the rapid development of new retail channels like O2O and content e-commerce[44][46] - The company collaborated with 1,708 offline distributors and sold products through distributors to 147 national or regional operators for hypermarkets, supermarkets, and chained convenience stores as of December 31, 2023[59][60] - The company expedited the process of embracing emerging channels such as O2O and snack specialty retailers in the second half of 2023, establishing close cooperation with major systems of snack specialty retailers[61] - The company established its presence in major e-commerce platforms, including traditional and emerging content e-commerce platforms, to cover all channels of e-commerce platforms[62] - The company's online models include online direct sales and online distribution, complementing offline channels, and focus on creating topics and increasing interaction with consumers through short videos, internal live streaming, and influencer live streaming[62] - Revenue from offline channels increased by 5.2% from RMB4,145.9 million in 2022 to RMB4,361.2 million in 2023, driven by growth in emerging channels like O2O and snack specialty retailers, partially offset by a decline in traditional offline channels due to reduced consumer flow[65] - Revenue from online channels grew by 5.0% from RMB486.3 million in 2022 to RMB510.4 million in 2023, with online distribution revenue decreasing by 17.2% to RMB195.9 million and online direct sales revenue increasing by 26.0% to RMB314.5 million, reflecting the company's focus on capturing growth opportunities from content e-commerce platforms like Douyin[66] - Overseas revenue from offline distributors increased significantly, contributing RMB97.6 million in 2023 compared to RMB65.5 million in 2022, representing 2.2% of total revenue, driven by active expansion into overseas markets[68][69] - The company's total revenue for 2023 was RMB4,871.7 million, with offline channels contributing 89.5% (RMB4,361.2 million) and online channels contributing 10.5% (RMB510.4 million)[64] - Eastern China remained the largest revenue contributor among domestic regions, generating RMB967.1 million in 2023, up from RMB877.0 million in 2022, and accounting for 22.2% of total revenue[68] Financial Performance - Revenue for 2023 reached RMB 4,871.7 million, a 5.2% increase from 2022[24] - Gross profit for 2023 was RMB 2,322.7 million, with a gross margin of 47.7%, up 5.4 percentage points from 2022[24][26] - Adjusted net profit for 2023 was RMB 970.3 million, a 6.3% increase from 2022[24] - Adjusted EBITDA margin for 2023 improved to 31.2%, up 2.6 percentage points from 2022[26] - Inventory turnover days decreased to 73 days in 2023, down from 82 days in 2022[26] - Trade receivables turnover days improved to 4.4 days in 2023, down from 4.9 days in 2022[26] - Total assets for 2023 increased to RMB 7,053.6 million, up 1.8% from 2022[25] - Net assets for 2023 grew to RMB 5,705.9 million, a 3.3% increase from 2022[25] - The liability-to-asset ratio decreased to 19.1% in 2023, down 1.2 percentage points from 2022[26] - Adjusted return on equity for 2023 was 17.3%, down 2.6 percentage points from 2022[26] - The Group's overall revenue for the year was RMB4,871.7 million, representing a 5.2% increase compared to the previous year[31][32] - Gross profit margin was 47.7%, up 5.4 percentage points from 42.3% in the previous year[31][32] - Net profit was RMB880.4 million, a 481.9% increase compared to the previous year, while adjusted net profit was RMB970.3 million, up 6.3%[31][32] - Total revenue for the year increased by 5.2% to RMB4,871.7 million, driven by growth in emerging channels such as O2O, snack specialty retailers, and content e-commerce platforms[45][46] - Gross profit rose by 18.5% to RMB2,322.7 million, with gross profit margin improving from 42.3% to 47.7% due to higher average selling prices, lower raw material costs, and optimized cost management[45][46] - Net profit surged by 481.9% to RMB880.4 million, primarily due to increased gross profit and the absence of share-based payments related to Pre-IPO investments[45][46] - Adjusted net profit increased by 6.3% to RMB970.3 million, with adjusted net profit margin slightly improving from 19.7% to 19.9%[45][46] - Revenue from seasoned flour products decreased by 6.2% from RMB2,718.6 million in 2022 to RMB2,549.2 million in 2023, accounting for 52.3% of total revenue, down from 58.7% in 2022[54][55] - Revenue from vegetable products increased by 25.1% from RMB1,693.3 million in 2022 to RMB2,118.5 million in 2023, accounting for 43.5% of total revenue, up from 36.6% in 2022[55][56] - Sales volume of seasoned flour products decreased by 17.4% to 124,427.2 tons in 2023, while vegetable products sales volume increased by 31.1% to 71,454.7 tons[58][59] - Revenue from bean-based and other products decreased by 7.4% from RMB220.3 million in 2022 to RMB203.9 million in 2023, accounting for 4.2% of total revenue[54][55] - Revenue increased by 5.2% to RMB4,871.7 million in the current year, driven by growth in emerging channels such as O2O, snack specialty retailers, and content e-commerce platforms[90] - Gross profit rose by 18.5% to RMB2,322.7 million, with gross profit margin increasing by 5.4 percentage points to 47.7% due to higher average selling prices, lower raw material costs, and optimized cost management[91][93] - Distribution and selling expenses increased by 27.4% to RMB806.7 million, accounting for 16.6% of total revenue, driven by higher employee benefits and a 53.6% increase in promotion and advertising expenses[92][94] - Administrative expenses decreased by 4.7% to RMB458.9 million, with the proportion to total revenue dropping from 10.4% to 9.4%[95][101] - Net finance income surged by 204.3% to RMB175.6 million, primarily due to increased bank interest income[98][103] - Income tax expense increased by 52.8% to RMB398.9 million, driven by higher taxable income and increased withholding tax provisions[99][103] - Profit for the year skyrocketed by 481.9% to RMB880.4 million, largely due to the absence of share-based payments related to Pre-IPO investments and higher gross profit[100] - Annual profit increased by 481.9% from RMB 151.3 million in the previous year to RMB 880.4 million in the current year, primarily due to the increase in gross profit and share-based payments related to Pre-IPO investments[104] - Adjusted net profit (Non-IFRS measure) increased by 6.3% from RMB 913.1 million in the previous year to RMB 970.3 million in the current year, with the adjusted net profit margin rising from 19.7% to 19.9%[110] - The company proposed a final dividend of RMB 0.10 per share, totaling approximately RMB 235.1 million, representing 27% of the net profit for the year ended December 31, 2023[110] - A special dividend of RMB 0.11 per share was proposed, totaling approximately RMB 258.6 million, representing 30% of the net profit for the year ended December 31, 2023[110] - Total term deposits, restricted cash, and cash equivalents increased by 19.1% to RMB 4,690.5 million at the end of the current year, compared to RMB 3,939.3 million at the end of the previous year[113] - Borrowings increased from RMB 161.3 million at the end of the previous year to RMB 180.9 million at the end of the current year, primarily for plant construction and machinery purchases[113] - Inventories decreased by 29.9% from RMB599.3 million to RMB419.9 million, with inventory turnover days reduced from 82 to 73 days[115][118] - Trade receivables decreased by 22.3% from RMB66.4 million to RMB51.6 million, with turnover days reduced from 4.9 to 4.4 days[116][119] - Other receivables decreased by 38.0% from RMB62.4 million to RMB38.7 million[116][119] - Prepayments increased by 9.0% from RMB111.2 million to RMB121.2 million[117][119] - Financial assets at fair value through profit or loss decreased by 67.9% from RMB382.4 million to RMB122.8 million[120][125] - Trade payables decreased by 12.1% from RMB187.3 million to RMB164.7 million, with turnover days reduced from 26 to 25 days[121][126] - Contract liabilities and refund liabilities decreased by 8.4% from RMB225.3 million to RMB206.3 million[122][127] - Gearing ratio increased from 2.9% to 3.2%[123][128] - Capital commitments for property, plant, and equipment decreased from RMB79.5 million to RMB49.4 million[131][137] - Pledged land use rights decreased from RMB93.8 million to RMB91.8 million[132][138] Production and Capacity - The company operates multiple production plants in Luohe, Henan Province, including Luohe Pingping Plant, Luohe Weidao Plant, Luohe Weilai Plant, and Luohe Xinglin Plant[10] - The company's total production capacity in 2023 was 339,884.9 tons, with actual production reaching 187,994.0 tons, resulting in a utilization rate of 55.3%, down from 59.2% in 2022[73] - Seasoned flour products accounted for the largest share of production, with a designed capacity of 237,722.4 tons and actual production of 114,791.6 tons in 2023, achieving a utilization rate of 48.3%[73] - Vegetable products saw a utilization rate increase to 72.0% in 2023, up from 64.4% in 2022, with actual production reaching 69,309.0 tons against a designed capacity of 96,228.0 tons[73] - The company operates five production plants in Henan, with the Luohe Xinglin Plant currently undergoing capacity expansion and partially operational as of December 31, 2023[71][72] - Designed production capacity for seasoned flour products decreased in the current year due to production line adjustments, while vegetable products and bean-based products increased due to new production lines at Luohe Xinglin Plant[74][75] - Overall utilization rate decreased to 55.3% in 2023 from 59.2% in 2022, primarily due to a drop in utilization rate of seasoned flour products[76][77] - Luohe Xinglin Plant achieved the highest utilization rate at 93.6% in 2023, up from 90.1% in 2022, driven by higher efficiency and production line shifts[76][77] Corporate Governance and Board Structure - The company's board of directors includes executive directors such as Mr. LIU Weiping (Chairman), Mr. LIU Fuping (Vice Chairman), and Mr. SUN Yinong (Chief Executive Officer), as well as independent non-executive directors like Ms. XU Lili and Mr. ZHANG Bihong[18] - The company's audit committee is chaired by Mr. ZHANG Bihong, with members including Ms. XU Lili and Ms. XING Dongmei[18] - The company's nomination committee is chaired by Mr. LIU Weiping, with members including Ms. XU Lili and Mr. ZHANG Bihong[19] - The company's remuneration committee is chaired by Ms. XING Dongmei, with members including Ms. XU Lili and Mr. CHEN Lin[19] - The company's website is www.weilongshipin.com[18] - The Company emphasizes corporate governance, including a diligent Board of Directors and a robust risk management and internal control system[146] - The Board is responsible for formulating the Company's long-term and short-term strategic direction, including development strategy, major investments, and significant asset acquisitions or disposals[148][149] - Management provides monthly reports to the Board, supported by up-to-date financial data, to ensure informed decision-making[150] - The Board's authorization to management includes daily production, management, and operational decisions, but excludes major decisions and key personnel appointments[151] - The company's Board consists of nine Directors, including six executive Directors and three independent non-executive Directors, ensuring a balance of skills and experience[153][157] - The Board complies with the Listing Rules by having at least three independent non-executive Directors, with one possessing appropriate professional qualifications or financial expertise[154][157] - The Board includes two female members, accounting for 22.22% of the total Directors, aligning with gender diversity requirements[160][162] - The company's employees (including executive Directors and senior management) achieved gender diversity with 42.7% male and 57.3% female employees as of December 31, 2023[163][166] - The roles of Chairman and Chief Executive Officer are separated, with Mr. LIU Weiping as Chairman and Mr. SUN Yinong as CEO, ensuring a balance of power and authority[159][161] - The company has adopted a Board diversity policy, selecting candidates based on gender, age, cultural background, industry experience, and other factors[160][162] - The company has made appropriate insurance arrangements for Directors regarding any legal proceedings[158][161] - The Board is responsible for developing and reviewing corporate governance policies, monitoring compliance, and ensuring adherence to the Corporate Governance Code[164][165] - The Board reviewed and ensured compliance with the Corporate Governance Code and disclosed requirements in the Corporate Governance Report[167] - All Directors participated in training courses or reading materials on corporate governance and related topics, with records provided to the Company[169] - The Board held four meetings and one general meeting in 2023, with all Directors attending all meetings[174] - The Audit Committee comprises three independent non-executive Directors and oversees financial policies, risk management, and internal controls[177] - The Board adopted a policy on seeking independent professional advice by Directors on March 23, 2023, and will review its implementation annually[168] - The Company has mechanisms in place for Directors to seek independent professional advice to ensure access to independent views[168] - The Board is responsible for leadership, strategic decisions, and maintaining effective risk management and internal control systems[175] - The Chairman held one meeting with independent non-executive Directors without the attendance of other Directors in 2023[176] - The Audit Committee supervises the financial activities, internal audit, and external accounting firm's work[177] - The Board has three committees: Audit, Nomination, and Remuneration, each with specific terms of reference[172] - The Audit Committee held four meetings in 2023, exceeding the minimum requirement of two meetings per year as stipulated by the Corporate Governance Code[179] - The Audit Committee reviewed the company's annual results for 2023 and confirmed compliance with all applicable accounting standards and regulations, with sufficient disclosures made[180] - The Audit Committee was satisfied with the effectiveness and sufficiency of the company's internal control mechanisms, including financial, operational, and compliance controls, as well as risk management

卫龙的增长经不起细看 作者丨侯书青 思维财经&投资者网 出品丨ID：touzizhebao 单看卫龙美味(下称"卫龙"，09985.HK)2023年财报中的主要财务指标，营收、净利润都有所增长，但当我们将目光放到公司业务层面，在其线下货架上，就 会发现昔日的"辣条王者"，如今的处境难言顺利。与众多竞争对手相比，卫龙困于"辣条"太久了。 大多数时候，市场的眼光都是雪亮的，这份财报虽然没有给卫龙的股价带来与净利润增速相匹配的增长，却为公司管理层带来了分红的底气：2023年公司的 总派息比率高达90%，其中有超过8成分红落入实控人刘福平、刘卫平的口袋。 卫龙能取得今天的行业地位，与它率先解决目标消费者的"食安焦虑"、出色的营销策略有莫大的关系。但这些终究难以为公司建立起坚固的护城河，拳头产 品够硬固然重要，但再硬的拳头，也难以改变"消费者喜欢新鲜感，且始终拥有选择权"的事实。 辣条不好卖了？ 看完卫龙的2023年财报，最令人意想不到的发现是：这么有名的辣条，居然不好卖了。 卫龙2023年全年实现总收入48.72亿元，同比增长5.2%，年内净利润同比增长了481.9%。公司在年报中解释称，公司净利润大幅增长主要系毛利 ...

Core Viewpoint - The price of Wei Long's spicy strips has surpassed that of pork, raising public concern about the increasing cost of the product amid declining sales and production capacity utilization [1][2]. Financial Performance - In 2023, Wei Long reported revenue of 4.872 billion RMB, a year-on-year increase of 5.2%, and a net profit of 880 million RMB, which represents a significant growth of 481.9% [1]. - The gross profit for the year was 1.96 billion RMB, with a gross margin of 47.7%, up 5.4 percentage points from the previous year [1][6]. - The increase in revenue was attributed to new sales channels, while the decline in traditional channels partially offset this growth [1]. Product Pricing and Sales - The average selling price of Wei Long's spicy strips rose from 18.1 RMB/kg in 2022 to 20.5 RMB/kg in 2023, making it more expensive than pork, which averaged 20.46 RMB/kg [2][7]. - The sales volume of spicy strips decreased by 17.4% to 124,427.2 tons, equating to a drop of 26,100 tons [6][8]. Market Challenges - Several brokerage firms have downgraded their profit forecasts for Wei Long due to weak demand for spicy strips, with estimates for 2024 and 2025 net profits reduced by 10% and 6%, respectively [3][4]. - The company's production capacity utilization for spicy strips fell to 48.3% in 2023 from 57.1% in 2022, indicating underutilization of resources [8][9]. Strategic Positioning - Wei Long has been removed from the Hong Kong Stock Connect list, which may impact its liquidity and investor confidence [1][4]. - The company is focusing on diversifying its product offerings, with vegetable products seeing a revenue increase of 25.1% in 2023, now accounting for 43.5% of total revenue [5][6].

Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 6.85, based on a current price of HKD 5.62 [1][3]. Core Insights - The company reported a revenue of CNY 4.87 billion for 2023, a year-on-year increase of 5.2%, and a net profit of CNY 880 million, reflecting a significant year-on-year growth of 481.9% [2][13]. - The growth in vegetable products is notable, with a revenue increase of 25.1%, while the sales of seasoned noodle products faced pressure, declining by 6.2% [2][15]. - The company is actively exploring new channels, particularly in the snack wholesale sector, and has accelerated its product launches to seek new growth opportunities [3][28]. Revenue and Profitability - The company's revenue structure shows a gradual balance between seasoned noodle products and vegetable products, with the latter's revenue share increasing significantly [2][13]. - The gross profit margin improved to 47.7%, up by 5.4 percentage points year-on-year, driven by lower raw material costs and an increase in high-margin vegetable products [18][19]. - The adjusted net profit margin was 19.9%, reflecting a slight increase of 0.2 percentage points year-on-year [18][19]. Product Performance - For 2023, the revenue from seasoned noodle products was CNY 2.55 billion, while vegetable products generated CNY 2.12 billion [2][15]. - The sales volume for seasoned noodle products decreased by 17.4%, while vegetable products saw a 31.1% increase in sales volume [15][18]. - The company has optimized its product structure, leading to an increase in average prices for seasoned noodle products despite a decline in sales volume [15][18]. Market Position and Strategy - The company holds a leading position in the spicy snack market, with a market share of 6.2% as of 2022, significantly outperforming its closest competitors [9][31]. - The company is focusing on enhancing its presence in both domestic and overseas markets, with overseas revenue growing by 49.1% [19][21]. - The company plans to increase its revenue contribution from new product launches and snack wholesale channels, aiming for a double-digit revenue share from these segments by 2024 [3][28]. Financial Forecast - The forecast for net profit is CNY 1.05 billion for 2024, CNY 1.22 billion for 2025, and CNY 1.41 billion for 2026, with corresponding EPS of CNY 0.45, CNY 0.52, and CNY 0.60 [3][28]. - The company is expected to maintain a gross profit margin of around 48% to 49% over the next few years, with vegetable products continuing to drive profitability [28][29].

Investment Rating - The report maintains a "Buy" rating for the company [1][7][17] Core Insights - The company achieved a revenue of 4.87 billion RMB in 2023, reflecting a year-on-year growth of 5.2%, with a gross profit of 2.32 billion RMB, up 18.5% year-on-year, and a net profit of 880 million RMB, showing a significant increase of 481.9% year-on-year [9][12] - The company plans to distribute a total dividend of approximately 90% of its net profit for 2023, which includes a regular dividend of 0.10 RMB per share and a special dividend of 0.11 RMB per share [9][12] - The company is focusing on brand building, new product launches, and channel diversification to strengthen its competitive position [7][9] Financial Summary - Revenue growth is projected to continue, with expected revenues of 5.61 billion RMB in 2024 and 6.37 billion RMB in 2025, representing growth rates of 15.1% and 13.6% respectively [5][17] - The company’s net profit is expected to reach 1.01 billion RMB in 2024 and 1.19 billion RMB in 2025, with corresponding growth rates of 14.8% and 18.2% [5][17] - The price-to-earnings (PE) ratio is projected to decrease from 13.96 in 2023 to 10.29 in 2025, indicating improved valuation [5][17] Product and Channel Performance - The company’s revenue from vegetable products grew by 25.1% in 2023, driven by new product launches and increased production capacity [12][14] - Revenue from seasoning noodle products declined by 6.2% due to structural adjustments and a decrease in traditional channel traffic, but is expected to improve in 2024 [12][14] - The company is expanding its online and offline marketing efforts, with a focus on new media and content e-commerce, which is anticipated to drive growth in 2024 [12][16] Market Position and Strategy - The company is enhancing its brand influence and organizational capabilities through increased investment in sales and management [13][16] - The revenue structure is becoming more balanced, with the share of seasoning noodle products decreasing from 58.7% in 2022 to 52.3% in 2023, while vegetable products increased from 36.6% to 43.5% [15][16] - The company is actively responding to consumer demand by launching new products and customizing specifications for different channels, which helps mitigate the impact of channel structure changes on gross margins [16]

Investment Rating - The report maintains an "OUTPERFORM" rating for Weilong Delicious Global Holdings [3][6][9] Core Insights - The company's 2023 performance met market expectations, with revenue of 4.87 billion yuan, a year-on-year increase of 5.2%, and an adjusted net profit of 970 million yuan, a year-on-year increase of 6.3% [8][9] - The company significantly increased its dividend payout ratio from 30% in 2022 to 60% in 2023, with a total dividend distribution of 776 million yuan, representing nearly 90% of the net profit attributable to shareholders for the year [4][5] - The company is expected to launch new cross-category products in 2024, which may boost revenue growth [4] Financial Performance Summary - For 2023, the company achieved revenue of 48.72 billion yuan, with a net profit of 8.80 billion yuan, reflecting a substantial increase of 481.9% year-on-year [5][8] - The company forecasts revenue growth of 14.3% in 2024, reaching 55.7 billion yuan, and a net profit of 10.0 billion yuan, also reflecting a 14.3% increase [5][9] - The expected EPS for 2024-2026 is projected to be 0.43, 0.49, and 0.55 yuan respectively [5][9] Market Position and Valuation - The target price for Weilong is set at HKD 9.29, based on a 20x PE ratio for 2024, indicating a potential upside from the current price of HKD 5.59 [3][5][9] - The company has a market capitalization of HKD 13.14 billion (approximately USD 1.68 billion) [3][4]