PULIKE(SH:603566) HTSC·2024-07-10 02:02Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 15.25 [1][32]. Core Insights - The company's Q2 earnings are expected to show a significant narrowing of the year-on-year decline, with projected profits for H1 2024 estimated between RMB 69 million to RMB 81 million, representing a year-on-year decrease of 30% to 40%. Specifically, Q2 is expected to yield profits between RMB 41.69 million to RMB 53.69 million, with a year-on-year change of -19% to +3%, and a quarter-on-quarter increase of 53% to 97% [1][32]. - The improvement in Q2 earnings is attributed to the company's proactive marketing strategy adjustments and enhanced cost control, as well as the recovery of the pig farming industry, which has entered a profitable phase since late May 2023, positively impacting the sales of pig vaccines [1][32]. - The company is expected to benefit from a prolonged recovery period in the pig farming sector, with continued improvements in sales of its products, particularly pig vaccines, as downstream demand strengthens [1][32]. Financial Projections - The company forecasts net profits for 2024, 2025, and 2026 to be RMB 2.12 billion, RMB 2.60 billion, and RMB 3.06 billion respectively, with corresponding EPS of RMB 0.61, RMB 0.75, and RMB 0.88 [32]. - The company’s revenue for 2024 is projected to be RMB 1.376 billion, with a year-on-year growth of 9.87% [35]. - The company’s PE ratio is expected to be 20.66 for 2024, decreasing to 14.29 by 2026, indicating a favorable valuation trend [35]. Business Strategy - The company continues to focus on expanding its sales to large breeding groups and enhancing its technical service system, which has resulted in increased sales revenue from its top 30 breeding group clients [28]. - The company has successfully maintained growth in key products, including pig vaccines and disinfectants, for five consecutive years, and has received multiple national veterinary drug registration certificates for new vaccines [28][32]. - Recent acquisitions in 2023 are expected to drive the development of pet vaccines, pharmaceuticals, and functional health products, indicating a strategic diversification of the company's business [28].