CCG(SH:605099) Tianfeng Securities·2024-05-11 07:05Investment Rating - The report maintains a "Buy" rating for the company with a target price of 23.86 CNY [6][8]. Core Views - The company has shown improvement in profitability in Q1 2024, solidifying its position as a leader in the artificial turf industry [6]. - In Q1 2024, the company reported revenue of 700 million CNY, a year-on-year increase of 23%, and a net profit attributable to shareholders of 120 million CNY, up 29% year-on-year [6]. - The company plans to distribute a cash dividend of 220 million CNY for 2023, with a payout ratio of 50% [6]. Financial Performance - In 2023, the company's total revenue was 2.5 billion CNY, a slight decrease of 0.4% year-on-year, while net profit attributable to shareholders was 430 million CNY, down 4% year-on-year [6][8]. - The company’s gross margin for Q1 2024 was 30%, a decrease of 2 percentage points year-on-year, while the net profit margin was 17.6%, an increase of approximately 1 percentage point year-on-year [6]. - The company’s artificial turf sales volume in 2023 reached 7.258 million square meters, an increase of 12% year-on-year [6]. Product Segmentation - In 2023, revenue from sports turf was 560 million CNY, a decrease of 7% year-on-year, while the gross margin increased by 5 percentage points to 36.5% [6]. - Revenue from leisure turf was 1.7 billion CNY, accounting for 69% of total revenue, with a year-on-year increase of 1% and a sales volume increase of 15% [6]. - The company aims to extend its product line and develop new growth points by offering additional materials such as plastic and other landscape leisure materials [6]. Production Capacity and Expansion - As of the end of 2023, the company has four production bases in China and Vietnam, with a total production capacity of 16.4 million square meters [6]. - The company plans to expand its production capacity further, with a new project in Mexico expected to add 1.6 million square meters of capacity [6]. - The company aims to achieve an annual production capacity of 14.6 million square meters of artificial turf after the completion of its production base projects [6].