DEEJ(SZ:000423) ZHESHANG SECURITIES·2024-08-04 05:23Investment Rating - The report maintains a "Buy" rating for Dong'e Ejiao [3][4] Core Views - The company has completed significant asset impairment, leading to a stabilization in operations. Positive operating cash flow has been recorded for twelve consecutive quarters since Q4 2020, and inventory levels are decreasing, enhancing the company's bargaining power with downstream partners [2][3] - Revenue growth is driven by new channels and products, including the Compound Ejiao Syrup, which has seen restrictions lifted for insurance coverage, facilitating smoother terminal sales. The company is focusing on a dual growth model of pharmaceuticals and health consumer products [2][3] - The company is seeking external acquisitions while motivating internal staff through a stock incentive plan, indicating a proactive approach to expanding its health-related business [2] Financial Summary - In 2023, the company reported revenue of ¥4,715 million, with projections of ¥5,960 million in 2024, representing a year-on-year growth of 26.40%. Net profit for 2023 was ¥1,151 million, expected to rise to ¥1,450 million in 2024, reflecting a growth of 26.01% [6][8] - The earnings per share (EPS) is projected to increase from ¥1.79 in 2023 to ¥2.25 in 2024, with a corresponding price-to-earnings (P/E) ratio of 21.10x for 2024 [6][8] - The company has maintained a high dividend payout ratio, with a distribution rate of 99.60% in 2023 and plans for a mid-term dividend in 2024 [3][6]