Hengshun Vinegar(SH:600305) Southwest Securities·2024-05-07 05:00Investment Rating - The report maintains a "Hold" rating for Hengshun Vinegar Industry [1][2] Core Views - The company reported a revenue of 2.11 billion yuan in 2023, a decrease of 1.5% year-on-year, and a net profit attributable to shareholders of 87 million yuan, down 37% year-on-year. The fourth quarter of 2023 saw a revenue of 470 million yuan, an increase of 2.4% year-on-year, but a net loss of 51 million yuan [1][16] - For the first quarter of 2024, the company achieved a revenue of 460 million yuan, a decline of 24.9% year-on-year, and a net profit of 55 million yuan, down 24.2% year-on-year [1][16] - The company is expected to experience a recovery in vinegar sales due to brand strength and increased market penetration, with projected sales growth rates of 2%, 1.5%, and 1% for 2024-2026 [6][20] Financial Summary - 2023 revenue: 2.11 billion yuan, 2024E: 2.20 billion yuan, 2025E: 2.30 billion yuan, 2026E: 2.42 billion yuan [3] - 2023 net profit: 87 million yuan, 2024E: 176.68 million yuan, 2025E: 193.07 million yuan, 2026E: 210.03 million yuan [3] - EPS for 2024-2026 is projected at 0.08 yuan, 0.16 yuan, and 0.17 yuan respectively [2][3] - The company’s gross margin for 2023 was 33%, down 1.4 percentage points year-on-year, while the gross margin for Q1 2024 was 41.4%, up 6.3 percentage points year-on-year [17] Business Segmentation - The vinegar segment generated 1.29 billion yuan in revenue in 2023, with a growth rate of 0.8%. The wine and sauce segments generated 330 million yuan and 190 million yuan, with declines of 8.4% and 23.6% respectively [17][33] - For Q1 2024, the vinegar, wine, and sauce segments reported revenues of 307 million yuan, 77 million yuan, and 33 million yuan, with year-on-year declines of 20%, 30.9%, and 49.3% respectively [17] Future Outlook - The company plans to focus on optimizing its organizational structure and enhancing its brand recognition across its product lines, aiming for double-digit revenue growth in 2024 [42] - The company is currently undergoing a reform period, which may lead to short-term performance pressure, but long-term operational improvements are anticipated [42]