Yanghe(SZ:002304) Tai Ping Yang·2024-04-30 05:30Investment Rating - The report assigns a rating of "Accumulate" to the company with a target price of 106.80, compared to the last closing price of 100.09 [1][4]. Core Views - The company is currently in an adjustment phase, with notable growth in low-end liquor sales. The performance in Q1 2024 was satisfactory, achieving a revenue of 162.55 billion, up 8.03% year-on-year, and a net profit of 60.55 billion, up 5.02% year-on-year [1][4]. - The company aims for a revenue growth of 5%-10% in 2024, focusing on deepening its market presence and enhancing operational efficiency [1][4]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 331.26 billion, a year-on-year increase of 10.04%, and a net profit of 100.16 billion, up 6.80% year-on-year. The Q4 2023 revenue was 28.43 billion, down 21.51% year-on-year, with a net loss of 1.88 billion, down 161.28% year-on-year [1][4]. - The revenue from mid-to-high-end liquor and ordinary liquor in 2023 was 285.39 billion and 39.50 billion, respectively, with year-on-year growth of 8.82% and 20.70% [1][4]. Cost and Profitability - The gross margin for 2023 was 75.25%, with a slight increase in Q1 2024 to 76.03%. The net profit margin for 2023 was 30.25%, which decreased to 37.24% in Q1 2024 due to increased sales expenses [1][4]. - The company reported a historical high dividend payout of 70.2 billion in 2023, with a dividend rate of 70%, resulting in a current market capitalization corresponding to a dividend yield of 4.7% [1][4]. Market Strategy - The company is focusing on expanding its market presence outside its home province, with revenue from provincial and non-provincial markets reaching 143.93 billion and 180.96 billion, respectively, showing year-on-year growth of 8.05% and 11.85% [1][4]. - The number of distributors increased, with a net addition of 568 distributors in non-provincial areas, indicating ongoing efforts to enhance distribution channels [1][4]. Future Outlook - The company forecasts revenue growth rates of 9%, 8%, and 7% for 2024-2026, with net profit growth rates of 7%, 7%, and 6% for the same period [1][4]. - The report anticipates earnings per share (EPS) of 7.12, 7.61, and 8.05 for 2024-2026, with corresponding price-to-earnings (PE) ratios of 14x, 13x, and 12x [1][4].