King's Luck(SH:603369) Southwest Securities·2024-08-19 10:00Investment Rating - The report maintains a "Buy" rating for the company with a current price of 42.99 CNY and a target price not specified for the next six months [1]. Core Insights - The company reported a total revenue of 7.31 billion CNY for H1 2024, representing a year-on-year increase of 22.4%. The net profit attributable to the parent company was 2.46 billion CNY, up 20.1% year-on-year, with Q2 2024 revenue at 2.63 billion CNY, a 21.5% increase, and net profit at 930 million CNY, a 16.9% increase, aligning with market expectations [2]. - The product structure continues to upgrade, with significant growth in high-priced products. The revenue from different product categories in Q2 2024 was 1.68 billion CNY (+21.1%) for Special A+ products, 810 million CNY (+25.3%) for Special A products, and 80 million CNY (+10.0%) for A products. The company also saw a remarkable 36.8% growth in revenue from outside the province [2]. - The comprehensive expense ratio decreased, with a gross margin increase of 0.15 percentage points to 70.02%. The sales expense ratio fell by 0.91 percentage points to 12.23%, while the management expense ratio slightly increased by 0.07 percentage points to 3.94%. The overall expense ratio decreased by 0.46 percentage points to 14.96% [2]. Financial Forecast and Valuation - The company is expected to achieve earnings per share (EPS) of 3.04 CNY, 3.70 CNY, and 4.51 CNY for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (PE) ratios of 14x, 12x, and 10x. The company benefits from a strong competitive advantage in the domestic market and a nationwide expansion strategy, indicating a positive long-term growth outlook [3][4].