NONGFU SPRING(09633) 信达证券·2024-03-29 16:00Investment Rating - The investment rating for the company is "Buy" [1][3]. Core Insights - The company has shown robust revenue growth, with a total revenue of 42.667 billion RMB in 2023, representing a year-on-year increase of 27.4% [2]. - The net profit attributable to shareholders reached 12.079 billion RMB in 2023, up 42.2% year-on-year, indicating significant improvement in profitability [2]. - The company has diversified its product offerings beyond packaged water, focusing on health-oriented beverages such as tea drinks, functional drinks, and fruit juices, which have all seen substantial growth [2][3]. - The gross profit margin improved to 59.5% in 2023, an increase of 2.1 percentage points year-on-year, driven by lower raw material costs and supply chain optimization [2]. Summary by Sections Revenue Performance - In H2 2023, the company achieved revenue of 22.204 billion RMB, a year-on-year increase of 37.5% [1]. - Packaged drinking water revenue grew by 10.2% year-on-year to 9.82 billion RMB in H2 2023, with total annual revenue surpassing 20 billion RMB [1]. - Tea beverage revenue surged by 104.9% year-on-year to 7.373 billion RMB in H2 2023, with annual revenue increasing by 83.3% to 12.659 billion RMB [1]. Profitability Metrics - The net profit margin for 2023 was 28.3%, reflecting a 2.8 percentage point increase from the previous year [2]. - The company’s operating efficiency improved, with a decrease in sales expense ratio by 1.8 percentage points to 21.8% and management expense ratio down by 0.5 percentage points to 5.1% [2]. Future Earnings Projections - Earnings per share (EPS) are projected to be 1.33 RMB, 1.58 RMB, and 1.81 RMB for the years 2024, 2025, and 2026 respectively [2][3]. - The company is expected to maintain a price-to-earnings (P/E) ratio of 29, 25, and 22 for the same years, indicating a relatively low valuation compared to historical levels [3]. Competitive Positioning - The company is positioned as a benchmark in the beverage industry, demonstrating both growth potential and profitability across multiple product categories [3]. - The strategic focus on "natural and healthy" products has allowed the company to expand its market presence effectively [3].