CHINA PET FOODS(SZ:002891) Zhongyuan Securities·2024-08-22 09:00Investment Rating - The report maintains an "Accumulate" investment rating for the company [1][2] Core Views - The company's performance in H1 2024 is in line with expectations, showing rapid growth with total revenue of 1.956 billion yuan, a year-on-year increase of 14.08%, and a net profit attributable to shareholders of 142 million yuan, up 48.11% year-on-year [1] - The company has announced an employee stock ownership plan to enhance confidence, with a planned scale not exceeding 4.4639 million shares, accounting for approximately 1.52% of the total share capital [1][2] - The pet food production volume in China has increased by 21.4% year-on-year, while the overall industrial feed production has decreased by 4.1%, indicating a strong growth trend in the pet food sector [1][2] Financial Performance Summary - In H1 2024, the company's main grain revenue reached 422 million yuan, a year-on-year increase of 83.96%, accounting for 21.56% of total revenue [1] - The gross profit margin for the overall business improved by 3.33 percentage points year-on-year, with pet main grain showing the largest increase of 8.18 percentage points, reaching 35.84% [2] - The company expects to achieve net profits of 329 million yuan, 475 million yuan, and 568 million yuan for the years 2024, 2025, and 2026 respectively, with corresponding EPS of 1.12 yuan, 1.61 yuan, and 1.93 yuan [2][3] Market Position and Growth Potential - The company is one of the leaders in China's pet industry, benefiting from both domestic and international market growth [2] - The report anticipates that the company's valuation will continue to expand due to its growth potential, with a target PE of 17x for 2025 [2][4] - The company’s stock price is currently at 20.34 yuan, with a market capitalization of 5.982 billion yuan [1][4]