CCGB(SZ:300138) China Post Securities·2024-08-27 09:31Investment Rating - The investment rating for the company is "Buy" and is maintained [2] Core Views - The company reported a revenue of 3.491 billion yuan for the first half of 2024, a year-on-year decrease of 4.85%, and a net profit attributable to shareholders of 100 million yuan, down 66.57% year-on-year. The performance is under pressure, primarily due to significant losses in the cottonseed business, while the plant extraction business saw a rise in sales volume but a decline in gross margin [3][4] Summary by Sections Company Overview - Latest closing price: 7.06 yuan - Total shares / circulating shares: 533 million / 448 million - Total market value / circulating market value: 3.8 billion / 3.2 billion yuan - 52-week high / low price: 15.80 / 7.06 yuan - Debt-to-asset ratio: 58.6% - Price-to-earnings ratio: 7.83 - Largest shareholder: Lu Qingguo [3] Plant Extraction Business - Revenue from the plant extraction business reached 1.583 billion yuan, a year-on-year increase of 9.28%, with a gross margin of 16.81%, down 4.11 percentage points year-on-year. - Specific product performance: 1. Chili red: Price increased by 8.86% but sales volume decreased by 24.57% to 4,454 tons. 2. Chili extract: Sales volume surged by 120.78% to 850 tons due to increased procurement from Yunnan. 3. Lutein: Feed-grade sales exceeded 200 million grams, showing a significant recovery, while food-grade sales fell by 27.36% to 25.64 million grams [4]. Cottonseed Business - The cottonseed processing business saw a significant revenue decline of 13.61% year-on-year, with a gross margin of -0.19%. - The core subsidiary, Xinjiang Chenguang, reported a loss of 54.95 million yuan, compared to a profit of 88.15 million yuan in the same period last year, marking a year-on-year decline of 162.34% [4]. Investment Recommendations - The valuation adjustment is considered sufficient, and the "Buy" rating is maintained despite the underperformance of the cottonseed business. - Earnings per share (EPS) forecasts for 2024-2026 are adjusted to 0.56 yuan, 0.84 yuan, and 1.04 yuan respectively. The current stock price corresponds to a 2024 PE of only 13 times, indicating a sufficient valuation adjustment [5].