Juewei Food (SH:603517) KAIYUAN SECURITIES·2024-05-01 05:30Investment Rating - The investment rating for the company is "Outperform" (Maintain) [1] Core Views - The company achieved a revenue of 7.26 billion yuan in 2023, representing a year-on-year growth of 9.6%, and a net profit attributable to shareholders of 340 million yuan, which is a 46.6% increase year-on-year. For Q1 2024, the revenue was 1.7 billion yuan, down 7.0%, with a net profit of 165 million yuan, up 20.0% year-on-year. Despite pressure on same-store sales, the company is expected to gradually improve store operations and benefit from industry consolidation and cost pressure relief, maintaining the "Outperform" rating [1][2][25]. Financial Performance Summary - In 2023, the company focused on its core duck neck business, overcoming challenges such as raw material price fluctuations and weak external demand. The cost pressure has significantly eased, and as a leading player in the marinated food industry, the company is expected to contribute more profit elasticity through its ecosystem and channel expansion [16][25]. - The company's gross margin for Q4 2023 was 26.9%, an increase of 4.4 percentage points year-on-year, primarily due to improved prices of duck by-products. For Q1 2024, the gross margin rose to 30.0%, up 5.7 percentage points year-on-year [2][15]. - The company reported a net profit of 344 million yuan in 2023, with projections for 2024, 2025, and 2026 to reach 675 million yuan, 792 million yuan, and 896 million yuan respectively, indicating year-on-year growth rates of 96.1%, 17.2%, and 13.1% [26]. Revenue and Store Expansion - The company experienced an 8.5% revenue growth in Q4 2023, mainly driven by store expansion, with a total of 15,950 stores by the end of 2023, netting an increase of 874 stores. The company plans to maintain steady and orderly store expansion in 2024 [25][26]. - In Q1 2024, the revenue decline of 7.0% was attributed to significant drops in same-store sales. Revenue by product category showed mixed results, with poultry and other main businesses experiencing varied growth rates [25][26].