Investment Rating - The report maintains a "Buy" rating for Tong Ren Tang Guo Yao (3613) with a target price of HKD 12.99, indicating a potential upside of 38.0% from the current price [1][3]. Core Views - The company experienced a significant decline in revenue from mainland China in 2023, with a total revenue of HKD 1.3 billion, down 70.2% year-on-year, primarily due to high inventory levels from previous stockpiling by distributors [1]. - Despite the challenges in mainland sales, the company is expected to recover in 2024 as inventory levels normalize and marketing efforts are intensified [1]. - The company is expanding its product offerings and sales channels, including the introduction of new specifications and categories for its Lingzhi spore powder products, and enhancing cooperation with marketing firms in Hong Kong and overseas [1]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of HKD 1.3 billion from mainland China, a decrease of 70.2% year-on-year, while Hong Kong sales increased by 10.8% to HKD 9.2 billion, and overseas sales reached HKD 4.8 billion, up 1.8% [1]. - The overall gross margin improved by 2.3 percentage points to 68.7%, while net profit decreased by 4.6% to HKD 590 million, resulting in a net profit margin of 35.4% [1]. Product and Market Expansion - The company is focusing on the recovery of its Lingzhi spore powder sales as inventory is depleted and competition issues are resolved [1]. - New product registrations in Hong Kong and Southeast Asia are expected to enhance market presence and drive sales growth [1]. - The company is also developing flagship stores and marketing initiatives in Macau and Hong Kong to promote its products [1].
中国内地销售重新起航，2024有望恢复强劲增长