Milkground(SH:600882) Ping An Securities·2024-03-25 16:00Investment Rating - The report maintains a "Recommend" rating, indicating an expected stock performance that is 10% to 20% stronger than the market over the next six months [9][20]. Core Views - The company faced pressure on profits due to cost and exchange rate fluctuations, with a gross margin of 29.14% in 2023, down 4.95 percentage points year-on-year. This decline was attributed to a decrease in business revenue alongside rising raw material costs and currency fluctuations [5]. - The company is actively adjusting its operational strategies in response to market changes, with a focus on enhancing its cheese market share, which has further increased according to Kantar consumer index data [5]. - The company reported a total revenue of 4.049 billion yuan in 2023, a decrease of 16.2% year-on-year, and a net profit of 63 million yuan, down 53.1% year-on-year [25]. Financial Performance Summary - Revenue and Profit: The company achieved a revenue of 4.049 billion yuan in 2023, with a projected increase to 5.007 billion yuan in 2024, and further growth expected in subsequent years [10][27]. - Gross Margin: The gross margin for 2023 was 29.2%, with expectations of recovery to 30.0% in 2024 [10][27]. - Net Profit: The net profit for 2023 was 63 million yuan, with forecasts of 168 million yuan in 2024, indicating a significant recovery [10][27]. - Earnings Per Share (EPS): The EPS for 2023 was 0.12 yuan, projected to rise to 0.33 yuan in 2024 and further to 0.71 yuan by 2026 [10][27]. Business Segment Performance - The cheese segment generated 31.37 billion yuan in revenue in 2023, accounting for 77.69% of total revenue, despite a year-on-year decline of 18.91% [26]. - The liquid milk segment's revenue was 334 million yuan, representing 8.27% of total revenue, with a slight year-on-year decrease of 4.32% [12][26]. - The trading business reported revenue of 567 million yuan, down 5.44% year-on-year, with a negative gross margin of -2.70% due to rising raw material costs [26]. Valuation and Forecast - The report adjusts profit forecasts for 2024-2026, estimating net profits of 168 million yuan, 252 million yuan, and 363 million yuan respectively, with corresponding P/E ratios of 40.5, 27.0, and 18.8 [27].