STAR LAKE SCIENCE(SH:600866)2024-08-27 06:03Investment Rating - The report maintains an "Outperform" rating for the company [2][15]. Core Insights - The company achieved a recurring net profit increase of 128.03% year-on-year in the first half of 2024, with operating revenue of Rmb 8.486 billion, up 2.66% year-on-year [11][12]. - The gross profit margin improved to 15.84%, an increase of 4.15 percentage points year-on-year, while the net profit margin reached 6.01%, up 3.19 percentage points year-on-year [11][12]. - The company is constructing a new 600,000-ton corn deep processing production line, with a planned investment of Rmb 3.712 billion, primarily funded by bank loans [14]. Financial Summary - The company's market capitalization is Rmb 8.31 billion (approximately US$1.16 billion) with a current share price of Rmb 5.00 and a target price of Rmb 7.92 [2][3]. - Revenue projections for the next three years are as follows: Rmb 17.75 billion in 2024, Rmb 18.77 billion in 2025, and Rmb 19.70 billion in 2026, reflecting growth rates of 2%, 6%, and 5% respectively [6][10]. - Net profit forecasts are Rmb 1.10 billion for 2024, Rmb 1.22 billion for 2025, and Rmb 1.35 billion for 2026, with growth rates of 62%, 11%, and 11% respectively [6][10]. - The expected diluted EPS for the next three years is Rmb 0.66 in 2024, Rmb 0.73 in 2025, and Rmb 0.81 in 2026 [6][10]. Product Performance - The company's main product sales volume increased despite a decline in market prices, with feed additives revenue growing by 4.30% year-on-year to Rmb 5.575 billion, while food additives revenue slightly decreased by 0.47% to Rmb 2.257 billion [12][13].