CCG(SH:605099) Tianfeng Securities·2024-05-11 08:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 23.86 CNY [1]. Core Views - The company has shown improvement in earnings for Q1 2024, reinforcing its position as a leader in the artificial turf industry [1]. - The company reported Q1 2024 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 [1]. - The company plans to distribute a cash dividend of 220 million CNY for 2023, with a payout ratio of 50% [1]. Financial Performance - In 2023, the company's total revenue was 2.5 billion CNY, a slight decrease of 0.4% year-on-year, with a net profit of 430 million CNY, down 4% year-on-year [1]. - 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 [1]. - The company’s total assets as of 2023 were 3.12 billion CNY, with a total market capitalization of 9.55 billion CNY [1]. Product Segmentation - The revenue from sports turf in 2023 was 560 million CNY, a decrease of 7% year-on-year, while the gross margin increased by 5 percentage points to 36.5% [1]. - 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% [1]. - The company’s international revenue grew by 0.05% year-on-year, with a gross margin of 31%, an increase of 2 percentage points [1]. Production Capacity and Expansion - As of the end of 2023, the company had four production bases in China and Vietnam, with a total production capacity of 16 million square meters [1]. - The company plans to expand its production capacity to 146 million square meters annually after the completion of ongoing projects [1]. - The company has shifted its fourth-phase project investment location to Mexico, which is expected to add 16 million square meters of production capacity upon completion [1]. Strategic Development - The company aims to extend its industrial chain by evolving from a single product sales model to a comprehensive artificial turf system supplier and service provider [1]. - The company plans to enhance its product line by investing in and promoting new products to meet market demand [1].