Ligao Foods (SZ:300973) Guoxin Securities·2024-11-01 07:03Investment Rating - The report maintains an "Outperform" rating for the company [3][4]. Core Views - The company is a leader in China's frozen baking industry, with a strong performance in its cream business. In 2023, the company achieved revenue of 3.499 billion yuan, a year-on-year increase of 20.2%, while net profit attributable to shareholders was 73 million yuan, a decrease of 49.2% [1][4]. - The frozen baking food segment showed weak growth, while cream products performed steadily. The revenue from frozen baking food and raw materials accounted for approximately 58% and 42% respectively, with year-on-year changes of -7% and +30% [1][4]. - The company aims to become a "global integrated baking service provider," with over 800 product specifications as of June 2024, including frozen cakes and various sauces [1][4][12]. Financial Performance - In 2023, the company reported a revenue of 3.499 billion yuan, with a net profit of 73 million yuan, reflecting a significant decline in profitability [2][4]. - For the third quarter of 2024, the company achieved total revenue of 936 million yuan, a year-on-year decrease of 1.11%, but net profit attributable to shareholders increased by 35.07% to 68 million yuan [1][4]. - The projected revenues for 2024, 2025, and 2026 are 3.732 billion yuan, 4.133 billion yuan, and 4.503 billion yuan, respectively, with expected year-on-year growth rates of 6.7%, 10.7%, and 9.0% [2][4]. Market Position and Strategy - The company is focused on deepening its presence in the frozen baking industry and expanding its cream business, which has significant growth potential [1][4][20]. - The cream market in China is expected to grow steadily, with a market size of 10.73 billion yuan in 2022, reflecting a year-on-year increase of 7.3% [17][20]. - The company has established a nationwide production base and a comprehensive cold chain logistics system to enhance its market reach and operational efficiency [12][13]. Product and Channel Analysis - The main revenue sources for the company include frozen baking products, sauces, cream, and fruit products, with frozen baking products generating 2.21 billion yuan in revenue in 2023 [6][12]. - The company has seen rapid growth in its direct sales channel, with revenue from direct sales increasing by 49.2% year-on-year [6][12]. - The company’s marketing network is continuously expanding to penetrate smaller cities, ensuring rapid product promotion and quality service [13][14].