Toly Bread(SH:603866) EBSCN·2024-08-14 08:03Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Views - Despite current sales pressure, the company is actively managing operations and focusing on product innovation, with expectations for market advantage to expand following capacity release [2]. - The company reported a revenue of 3.021 billion yuan in the first half of 2024, a year-on-year decline of 5.79%, while the net profit attributable to shareholders was 290 million yuan, a slight decrease of 0.60% [1]. - The company is expected to optimize return rates and enhance production capacity, aiming for continuous performance improvement in the second half of the year [1]. Summary by Sections Financial Performance - In 1H24, the company's core products generated revenue of 2.985 billion yuan, down 5.37% year-on-year, with Q2 revenue at 1.621 billion yuan, a decline of 6.33% [1]. - The gross profit margin for 1H24 was 24.15%, an increase of 0.67 percentage points year-on-year, attributed to a decrease in return rates and reduced discounts [1]. - The net profit margin improved to 9.60%, up 0.50 percentage points year-on-year, indicating potential for further enhancement as production capacity increases [1]. Regional Performance - Revenue from key regions in 1H24 showed declines: North China at 697 million yuan (-6.7%), Northeast at 1.151 billion yuan (-12.3%), and East China at 989 million yuan (-3.4%) [1]. - The number of distributors in North China increased by 14, while Northeast and East China saw decreases of 3 and 9, respectively, highlighting the need for detailed operational adjustments [1]. Profitability Outlook - The report forecasts net profits for 2024-2026 at 598 million, 668 million, and 702 million yuan, respectively, with corresponding P/E ratios of 15, 14, and 13 times [2]. - The company is expected to continue improving its profitability as operational efficiencies are realized and market conditions stabilize [1][2].