Ligao Foods (SZ:300973) Changjiang Securities·2024-05-06 01:02Investment Rating - The report maintains a "Buy" rating for the company [9][30]. Core Insights - The company faced pressure on profit margins in 2023 but is expected to improve efficiency and profitability in 2024. The net profit margin decreased by 2.85 percentage points to 2.09% in 2023, while the gross profit margin fell by 0.38 percentage points to 31.39% [8]. - In Q4 2023, the net profit margin dropped significantly to -9.32%, and the gross profit margin decreased to 28.19%. However, in Q1 2024, the net profit margin rebounded to 8.38%, and the gross profit margin improved to 32.59% [8]. - The company is focusing on enhancing production capacity utilization and optimizing procurement, which is expected to lead to improved gross margins in the future [8]. Financial Performance Summary - In 2023, the company reported total revenue of 34.99 billion yuan, a year-on-year increase of 20.22%. However, the net profit attributable to the parent company was 73.03 million yuan, down 49.21% [20][27]. - For Q1 2024, total revenue was 9.16 billion yuan, reflecting a 15.31% increase, with a net profit of 76.77 million yuan, up 53.96% [20][27]. - The company’s earnings per share (EPS) for 2024-2026 are projected to be 1.61, 2.36, and 3.03 yuan, respectively, with corresponding price-to-earnings (PE) ratios of 20, 14, and 11 times [9]. Product and Channel Performance - In 2023, frozen baked goods accounted for 63% of revenue, growing by 24%, primarily driven by supermarket and restaurant clients. Baking ingredients contributed 36% of revenue, with a 13% increase, mainly from new cream products [28]. - In Q1 2024, the revenue from frozen baked goods remained stable at 61%, while baking ingredients increased to 39%, showing a 56% growth, particularly driven by UHT cream [28]. - The company is actively expanding new channels, with the food service and new retail channels seeing a revenue increase of over 50% [28]. Strategic Initiatives - The company is pursuing a multi-channel and multi-product development strategy, focusing on large products, key clients, and major distributors [29]. - Cost control measures include strict budget management, optimizing procurement, and improving logistics and warehousing [29].