Toly Bread(SH:603866) Minsheng Securities·2024-08-13 06:35Investment Rating - The report maintains a "Recommended" rating for the company [4]. Core Views - The company's main business is slightly under pressure, but profitability is recovering. In H1 2024, the company achieved revenue of 3.021 billion yuan, a year-on-year decrease of 5.79%, and a net profit attributable to shareholders of 290 million yuan, a decrease of 0.60% year-on-year [1]. - The company is steadily advancing its national layout while focusing on demand recovery. It is enhancing its sales network in mature markets and exploring potential in emerging markets [2]. - The report projects revenue for 2024-2026 to be 6.9 billion, 7.26 billion, and 7.76 billion yuan, respectively, with year-on-year growth rates of 2.1%, 5.2%, and 7.0% [3]. Summary by Sections Financial Performance - In H1 2024, the company reported a gross margin of 24.15%, improving to 25.06% in Q2, with a year-on-year increase of 0.68 and 1.98 percentage points, respectively [2]. - The company recorded a net profit margin of 10.78% in Q2 2024, an increase of 1.94 percentage points year-on-year [2]. - The company’s revenue from bread and pastries in H1 2024 was 2.985 billion yuan, down 5.37% year-on-year, while other business segments saw a significant decline [1]. Market Strategy - The company is focusing on expanding its market presence in regions such as Southwest China and Xinjiang while refining its sales network in mature markets [2]. - The report highlights the potential for growth in the short-shelf-life industry and the need for the company to adapt its product structure to meet changing consumer demands [2]. Future Projections - The forecast for net profit attributable to shareholders for 2024-2026 is 610 million, 660 million, and 720 million yuan, with growth rates of 6.7%, 7.3%, and 9.2%, respectively [3]. - The current stock price corresponds to a price-to-earnings ratio of 15, 14, and 13 for the years 2024, 2025, and 2026 [3].