Investment Rating - The investment rating for the company is maintained at "Buy-A" with a target price of HKD 19.49, based on the stock price of HKD 14.50 as of March 27, 2024 [4]. Core Insights - The company reported a revenue of HKD 6.147 billion in 2023, which remained flat year-on-year, while net profit increased by 11.2% to HKD 907 million, and attributable net profit rose by 14.9% to HKD 853 million [1][8]. - The company declared a dividend of HKD 767 million at the end of 2023, resulting in a dividend payout ratio of approximately 90% and a dividend yield of about 6.0% based on the stock price [1]. - The company is focusing on channel management and expanding into B-end and overseas markets, with new product development to drive revenue growth [9]. Revenue Breakdown - In 2023, revenue from related parties and third parties was HKD 20.1 billion and HKD 41.4 billion, respectively, showing a year-on-year increase of 35.0% for related parties and a decline of 11.2% for third parties [2]. - The hot pot seasoning category achieved a total revenue of HKD 40.9 billion, with a year-on-year increase of 11.7%, while the convenience food segment saw a decline of 25.8% [2]. - The company experienced a significant recovery in related party demand due to the improvement in offline dining, while third-party hot pot seasoning faced slight declines due to market competition [2]. Profitability and Cost Management - The company achieved a gross margin of 31.6% in 2023, an increase of 1.4 percentage points year-on-year, primarily due to lower raw material costs [3]. - The selling expense ratio was 9.6%, down 0.9 percentage points year-on-year, while the management expense ratio increased to 4.5% [3]. - The attributable net profit margin improved to 13.9%, reflecting a year-on-year increase of 1.8 percentage points [3]. Future Outlook - The company expects to continue expanding its B-end market and enhance its product matrix to capture more market share [9]. - Revenue projections for 2024-2026 are estimated at HKD 69.0 billion, HKD 76.6 billion, and HKD 83.7 billion, with attributable net profits of HKD 9.7 billion, HKD 10.9 billion, and HKD 11.8 billion, respectively [9].
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