Investment Rating - The report maintains a Neutral rating for the company with a target price of HKD 10.40, indicating a potential downside of 10.8% from the current price of HKD 11.66 [2][7]. Core Insights - The company's 2023 net profit and cash balance fell below expectations, with sales growth meeting projections but net profit growth lagging significantly behind market expectations [1][2]. - The decline in net profit is attributed to several one-off factors, including inventory write-downs, goodwill impairment from past acquisitions, and increased financial costs due to currency depreciation [1]. - The cash balance decreased from RMB 2.1 billion in June 2023 to RMB 1.37 billion by the end of 2023, raising concerns among investors about the company's liquidity and refinancing needs in 2024 [1][2]. Financial Performance Summary - For 2023, the company reported a sales revenue growth of approximately 9%, aligning with expectations, while the adjusted net profit growth was in the low single digits, significantly below the anticipated 24% [1][5]. - The breakdown of revenue by segment showed strong double-digit growth in adult nutrition and pet nutrition, while infant nutrition experienced a decline of 10-20% due to intensified competition during the transition to new national standards [1][5]. - The company is projected to achieve revenues of RMB 13.79 billion in 2023, with a forecasted growth rate of 8% for 2024 and 7.4% for 2025 [5][8]. Market Context - The report highlights that the company's stock performance has been relatively resilient due to strong sales momentum in nutritional supplements during the first nine months of 2023, despite the overall weak performance in the infant nutrition segment [2][8]. - The company is expected to hold an analyst briefing on March 27, 2024, which may provide further insights into its performance and strategic direction [2].
2023年净利润和现金余额低于预期