Fuling Zhacai(002507) 光大证券·2024-03-31 16:00Investment Rating - Buy (Maintained) [3] Core Views - Fuling Zhacai reported a decline in revenue and net profit for 2023, with revenue at 2.45 billion yuan (-3.9% YoY) and net profit at 827 million yuan (-8% YoY) [1] - The company is focusing on expanding its product line, particularly in the foodservice channel, with new products like pickles and sauces to drive growth [2] - The company aims to achieve a 10 billion yuan revenue target for its Wujiang brand by 2030 [2] Financial Performance - In 2023, the company's gross margin was 50.72%, down 2.43 pcts YoY, primarily due to a 40% increase in the purchase price of raw materials caused by drought [7] - The net profit margin for 2023 was 33.74%, down 1.53 pcts YoY [7] - Revenue from core products such as pickled vegetables, radishes, and pickles declined by 4.56%, 25.99%, and 6.51% respectively, while other products saw a 75.74% increase [17] Product and Channel Strategy - The company plans to stabilize its core pickled vegetable category while expanding into new growth areas such as side dishes and sauces [2] - The foodservice channel, which grew rapidly in 2023, will be further developed with new products like bean paste and pickles to target the catering market [2] - The number of distributors increased by 112 in 2023, with the South China region seeing the most significant growth [17] Future Outlook - Revenue is projected to grow to 2.669 billion yuan in 2024E, with a growth rate of 8.94% [8] - Net profit is expected to reach 925 million yuan in 2024E, with a growth rate of 11.92% [8] - The company's EPS is forecasted to be 0.80 yuan in 2024E, with a P/E ratio of 17x [8] Valuation and Profitability - The company's ROE (diluted) is expected to be 10.48% in 2024E, up from 10.03% in 2023 [8] - The P/B ratio is projected to decrease from 1.9 in 2023 to 1.8 in 2024E [8] - The EV/EBITDA ratio is expected to improve from 12.8 in 2023 to 11.6 in 2024E [22]