After the 2023 financial report was released by Chaoyun Group (06601.HK), a leading home care company, many leading brokerage firms, including CICC, Haitong Securities, and China Merchants Securities, have shown strong interest in it, and have published several research reports, which are generally rated to increase their holdings. They are optimistic about the company's development prospects, especially its steady growth trend and continued high dividends. The dividend rate is attractive and popular among investors.

Judging from Chaoyun Group's stock price performance in the Hong Kong stock market, the stock price increased by 18.52% in the past three months and 6.67% in the past month. Since entering 2024, the company's stock price has far exceeded the increase in Hong Kong's Hang Seng Index during the same period.

(Source: Public Information)

The basic home care market is growing steadily, and profitability has further improved

What is behind the stock price outperforming the market is the company's excellent fundamentals. Chaoyun Group achieved revenue of 1,616 billion yuan in 2023, an increase of 11.7%; net profit to mother was 173 million yuan, an increase of 164%.

As the basic market of Chaoyun Group, home care has shown a steady growth trend. Last year, the business revenue reached 1,472 billion yuan, an increase of 13.5% over the same period. Judging from the market share in the segment, Chaoyun Group has a stable position in the market for cleaning products. According to NielsenIQ retail market data, the company ranked first in the household insecticide and mosquito repellent market share for 9 consecutive years, and the second in the household cleaning market share.

As the company's core business, Chaoyun Group's home care business is not only large-scale, but also growing rapidly, showing the company's strong competitiveness and market expansion ability in this field, and the company's profitability has further improved.

Last year, Chaoyun Group's gross margin in the home care category rose to 45%. It can be seen from this that the company has achieved remarkable results in cost control, product innovation, price health, etc., improving the company's profitability. It also means that the company has more room for market expansion and product innovation research and development, laying the foundation for future continuous growth.

The rapid expansion of pet stores is gaining momentum and is expected to become a new growth curve

It is worth noting that Chaoyun Group's pet store business will also enter a period of expansion in 2023. Last year, the company bought two consecutive pet store brands, Claw Claw Planet and Millet, both of which are pet experience store brands integrating consumer entertainment in large shopping centers and lifestyle communities. After the acquisition, Chaoyun upgraded the original stores and has already seen initial results. Some stores have begun to generate profits and bear their own profits and losses.

This strategic move is expected to further enhance Chaoyun's competitiveness in the pet market. The company plans to accelerate the pace of expansion and transformation of pet stores in 2024, with the goal of increasing the number of stores to 80 to 100 throughout the year. Diversification of the pet business will help create the company's second-largest growth curve, forming a synergy effect with pet food, health products, etc.

Furthermore, Chaoyun Group's multi-brand, multi-category omnichannel strategy achieved remarkable results in 2023. Rapid growth has been achieved both online and offline. According to last year's annual report, the company's total offline channel revenue was 1,066 billion yuan, up 12.2% year on year; total online channel revenue was 550 million yuan, up 10.7% year on year.

Pay attention to shareholder returns, and high percentage dividends continue to be stable

While the company continues to focus on its main business and actively explore new growth curves, Chaoyun Group also attaches great importance to shareholder returns.

According to last year's annual report, Chaoyun Group announced a final dividend of 0.0640 yuan per share. Combined with the previously paid interim dividend of 0.0410 yuan per share, the total annual dividend was 0.1,050 yuan per share. This means that Chaoyun Group's dividend ratio in 2023 will be as high as 80%.

(Source: Public Information)

Since its listing in Hong Kong in 2021, Chaoyun Group has paid six dividends in three years. The company has continuously implemented a high dividend policy, with an annual dividend payout rate of 80%.

The stable and gradually increasing dividend payout rate not only reflects the company's commitment and responsibility to shareholders, but also reflects the company's good profitability and healthy financial condition. The reason why it is able to maintain a dividend payout rate of up to 80% is the company's sufficient cash flow support. According to the data, the total amount of the company's cash, cash equivalents and various bank deposits reached 2.9 billion yuan.

In a complex market environment, adequate cash flow is an important cornerstone for the stable development of an enterprise, and it is also an important indicator for investors to evaluate the investment value of an enterprise. This will undoubtedly further enhance investors' trust and confidence in the company.

summed

Chaoyun Group's 2023 financial report showed steady growth, improved profitability, and high stable dividend payment policies that attracted the attention of investors and many leading brokerage firms. Looking ahead to 2024, the company will continue to grow steadily, while the high dividend policy continues, which is worth paying attention to.