Toly Bread(SH:603866) Huachuang Securities·2024-08-13 03:36Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 7 yuan, while the current price is 5.77 yuan [1]. Core Views - The company reported a revenue of 3.021 billion yuan for the first half of 2024, a year-on-year decrease of 5.79%, with a net profit attributable to shareholders of 290 million yuan, down 0.6% year-on-year [1][2]. - In Q2 alone, the company achieved a revenue of 1.621 billion yuan, a decline of 6.33% year-on-year, but the net profit attributable to shareholders increased by 14.24% to 175 million yuan [1][2]. - The company has shifted its focus from scale expansion to improving operational quality and shareholder returns, with a cash dividend payout ratio of 66.21% for H1 2024 [2][3]. Revenue and Profitability - The revenue decline is attributed to weak demand, particularly in mature markets, with significant drops in regions such as Northeast and North China [2]. - The gross profit margin improved by 1.98 percentage points to 25.06% in Q2, driven by a reduction in return rates [2]. - The net profit margin increased by 1.94 percentage points to 10.78% in Q2, reflecting better cost management and operational efficiency [2]. Financial Forecasts - The company is projected to achieve a revenue of 6.541 billion yuan in 2024, a decrease of 3.2% year-on-year, with a net profit of 606 million yuan, an increase of 5.6% [3][10]. - Earnings per share (EPS) are expected to be 0.38 yuan in 2024, with a price-to-earnings (P/E) ratio of 15 times [3][10]. Strategic Adjustments - The company has begun to explore new channels and adjust its strategies to focus on quality over quantity, particularly in response to external pressures and changing market dynamics [2][3]. - The management is actively controlling return rates and optimizing personnel structure to enhance profitability [2].