Orient Securities·2024-03-31 16:00Investment Rating - The report maintains a "Buy" rating for the company [1][2] Core Views - The company reported a revenue of 42.67 billion yuan in 2023, representing a year-over-year increase of 28%, and a net profit attributable to shareholders of 12.08 billion yuan, up 42% year-over-year [1] - The beverage segment, particularly tea drinks, showed significant growth, with tea beverage revenue increasing by 83% year-over-year [1] - The company's gross margin improved to 59.5%, up 2.1 percentage points year-over-year, driven by lower costs of raw materials [1] - Recent negative online sentiment has impacted sales through online channels, but the overall competitive position of the company's products remains strong [1] Financial Performance Summary - Revenue and Profit Forecast: The company is expected to achieve revenues of 50.70 billion yuan and 58.56 billion yuan in 2024 and 2025, respectively, with net profits projected at 13.17 billion yuan and 14.90 billion yuan [3] - Earnings Per Share (EPS): The forecasted EPS for 2023, 2024, and 2025 are 1.07 yuan, 1.17 yuan, and 1.32 yuan, respectively [2][3] - Gross Margin: The gross margin is expected to remain stable around 59.2% in 2024 and 58.9% in 2025 [3] Valuation and Price Target - The estimated equity value of the company is 556.1 billion yuan, leading to a target price of 54.34 HKD per share based on the FCFF valuation method [2][6] - The report calculates a WACC of 6.99% for the company, which is used in the valuation analysis [6][7] Market Performance - The company's stock price as of March 28, 2024, was 42.25 HKD, with a 52-week range of 46.75 HKD to 37.95 HKD [4] - The report notes a relative performance of the stock against the Hang Seng Index, indicating a slight outperformance in the short term [4]