SCSF(SH:600779) Huachuang Securities·2024-04-29 04:02Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 60 CNY, while the current price is 46.17 CNY [1][2]. Core Insights - The company reported a total revenue of 4.95 billion CNY in 2023, representing a year-on-year growth of 6.0%. The net profit attributable to shareholders was 1.27 billion CNY, up 4.4% year-on-year. In Q4 2023, revenue reached 1.36 billion CNY, a significant increase of 51.3%, with net profit of 246 million CNY, up 53.2% [2][3]. - For Q1 2024, the company achieved revenue of 930 million CNY, a growth of 9.4%, and a net profit of 190 million CNY, increasing by 16.8% [2][3]. - The company has successfully maintained growth throughout 2023, with a notable performance in Q4 due to low base effects and effective inventory management [2][3]. Financial Performance Summary - 2023 Financials: Total revenue was 4.95 billion CNY, with a net profit of 1.27 billion CNY. The gross margin decreased by 1.3 percentage points to 83.2% [2][3]. - 2024 Projections: Expected revenue growth of 14.0% in 2024, with net profit projected to increase by 16.5% [3][13]. - Earnings Per Share (EPS): The EPS for 2023 was 2.60 CNY, with projections of 3.03 CNY for 2024, 3.52 CNY for 2025, and 4.09 CNY for 2026 [3][13]. Product Performance - The company's high-end product, "Zhen Niang Ba Hao," continues to show double-digit growth, while mid-range products saw a remarkable increase in sales, particularly the "Tian Hao Chen" series, which contributed to a 64.1% year-on-year growth in mid-range liquor sales [2][3]. - The company added approximately 9,000 effective stores throughout the year, enhancing its market presence by over 20% [2][3]. Cash Flow and Financial Health - The company reported healthy cash flow, with a significant increase in operating cash flow net amount by 46.0% in Q4 2023 and Q1 2024 [2][3]. - Contract liabilities stood at 1.15 billion CNY at the end of Q1 2024, indicating a relatively high level of obligations [2][3]. Strategic Growth Initiatives - The company plans to strengthen its presence in the mid-to-high-end market segments and enhance its distribution channels, aiming for double-digit growth in the "Tian Hao Chen" series [2][3]. - New product launches in the 200 CNY price range are anticipated, alongside the completion of a new project expected to add 20,000 tons of production capacity [2][3].