NONGFU SPRING(09633) 华创证券·2024-03-27 16:00Investment Rating - The report maintains a "Buy" rating for Nongfu Spring (09633.HK) with a target price of HKD 52 [1]. Core Insights - Nongfu Spring's 2023 annual report shows a significant increase in revenue and profit, with total revenue reaching CNY 42.667 billion, up 28.4% year-on-year, and net profit of CNY 12.079 billion, up 42.2% year-on-year [1][2]. - The growth in the ready-to-drink tea segment has accelerated, contributing to a revenue of CNY 73.73 million in the second half of 2023, marking a 104.8% increase [1]. - The company has optimized its sales expense ratio, leading to a net profit margin increase to 28.4% in the second half of 2023, up 5.5 percentage points year-on-year [1]. Summary by Sections Financial Performance - In 2023, Nongfu Spring achieved a total revenue of CNY 42.916 billion, with a year-on-year growth rate of 28.1% [2]. - The net profit for 2023 was CNY 12.079 billion, reflecting a 42.2% increase compared to the previous year [2]. - The earnings per share (EPS) for 2024-2026 are projected to be CNY 1.25, CNY 1.44, and CNY 1.63 respectively [2]. Segment Analysis - The ready-to-drink tea segment saw a revenue increase of 104.8% in the second half of 2023, driven by the success of the Dongfang Shuye brand [1]. - The functional beverage segment also performed well, with a revenue increase of 60.3% in the second half of 2023 [1]. Cost and Efficiency - The gross margin improved to 59.5% for the full year 2023, aided by lower costs for packaging materials and raw materials [1]. - The sales expense ratio decreased by 4.6 percentage points in the second half of 2023, contributing to overall profitability [1].