CHINA PET FOODS(SZ:002891) Guoxin Securities·2024-04-29 02:30Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company's overseas business remains robust, with a projected year-on-year increase of 259% in net profit for Q1 2024. The total revenue for 2023 is expected to reach 3.747 billion yuan, reflecting a year-on-year growth of 15.37% [4][40] - The company benefits from a strong retail environment in the U.S. and a favorable exchange rate, leading to an increase in gross margin and net profit [4][40] - The company is focusing on expanding its domestic market while leveraging its manufacturing capabilities in the U.S. and Canada to enhance overseas market growth [40][43] Financial Forecasts and Metrics - Revenue projections for the company are as follows: - 2022: 3.248 billion yuan - 2023: 3.747 billion yuan - 2024E: 4.196 billion yuan - 2025E: 4.671 billion yuan - 2026E: 5.120 billion yuan - Year-on-year growth rates are 12.7%, 15.4%, 12.0%, 11.3%, and 9.6% respectively [1] - Net profit forecasts are: - 2022: 106 million yuan - 2023: 233 million yuan - 2024E: 266 million yuan - 2025E: 306 million yuan - 2026E: 346 million yuan - Year-on-year growth rates are -8.4%, 120.1%, 14.1%, 15.1%, and 13.1% respectively [1] - Earnings per share (EPS) are projected to be: - 2022: 0.36 yuan - 2023: 0.79 yuan - 2024E: 0.90 yuan - 2025E: 1.04 yuan - 2026E: 1.18 yuan [1] Revenue Breakdown - In 2023, the revenue from different product segments is as follows: - Snack business: 2.351 billion yuan, year-on-year growth of 9.81%, accounting for 63% of total revenue - Canned pet food: 635 million yuan, year-on-year growth of 6%, accounting for 17% - Main food: 577 million yuan, year-on-year growth of 60%, accounting for 15% [5][40] - Revenue by business model in 2023: - OEM business: 2.153 billion yuan, year-on-year growth of 14%, accounting for 58% - Distribution business: 1.121 billion yuan, year-on-year growth of 9%, accounting for 30% - Direct sales: 466 million yuan, year-on-year growth of 47%, accounting for 12% [6][40] Profitability Metrics - The gross margin for 2023 is reported at 26.28%, an increase of 6.49 percentage points year-on-year, while the net profit margin is 7.79%, an increase of 4.07 percentage points [8][40] - The company’s EBIT margin is projected to improve from 5.2% in 2022 to 11.5% in 2026, indicating enhanced operational efficiency [1] Cash Flow and Working Capital - The net cash flow from operating activities for 2023 is expected to be 447 million yuan, with a ratio of net cash flow to revenue at 11.93% [23] - Inventory turnover days for 2023 are projected to be 78 days, while accounts receivable turnover days are expected to be 40 days [23]