Sichuan Teway Food (SH:603317) Guohai Securities·2024-03-28 16:00Investment Rating - The report assigns an "Accumulate" rating for the company, marking the first coverage [1][2]. Core Insights - The company has a rich product matrix and strong brand recognition in the C-end market, with recent efforts to leverage R&D advantages in the B-end market. The acquisition of Shicui in 2023 is expected to accelerate B-end expansion [2][7]. - The company reported a revenue of 3.149 billion yuan in 2023, a year-on-year increase of 17.02%, and a net profit attributable to shareholders of 457 million yuan, up 33.65% year-on-year [3][4]. - The company’s gross margin improved to 37.88% in 2023, an increase of 3.66 percentage points year-on-year, driven by lower raw material prices and product structure upgrades [16]. Financial Performance - The company’s earnings per share (EPS) are projected to be 0.51 yuan in 2024, 0.59 yuan in 2025, and 0.68 yuan in 2026, with corresponding price-to-earnings (P/E) ratios of 25X, 22X, and 19X respectively [2][34]. - The company achieved a net profit margin of 14.51% in 2023, reflecting a year-on-year increase of 1.81 percentage points [16]. - The revenue growth rate is expected to be 15% in 2024, 13% in 2025, and 13% in 2026, while the profit growth rate is projected at 18%, 16%, and 15% for the same years [34]. Market Position and Strategy - The company is focusing on health trends by launching new products such as the third-generation thick hot pot and non-spicy soups to meet consumer demand for higher quality [7]. - The company is enhancing its C-end advantages while leveraging the acquisition of Shicui to empower B-end development, aiming for resource and business synergy across production, products, and channels [7][16]. - The company has optimized its distribution channels, reducing the number of distributors to 3,165 by the end of 2023 while achieving an 8.81% year-on-year revenue growth in the distribution channel [4][7].