YADEA(01585) 华创证券·2024-08-29 10:41Investment Rating - The report maintains a "Strong Buy" rating for Yadea Holdings (01585.HK) with a target price of HKD 13, while the current price is HKD 10.8 [1]. Core Views - The company's revenue for the first half of 2024 (24H1) was HKD 14.41 billion, a decrease of 15.4% year-on-year, with a net profit attributable to shareholders of HKD 1.03 billion, down 13.0% year-on-year [1]. - The decline in sales is attributed to stricter industry regulations and weakened demand, leading to inventory destocking among distributors, resulting in a 22% year-on-year drop in sales volume to 6.38 million units [1]. - Despite the sales decline, the gross profit margin improved by 1.1 percentage points year-on-year to 18%, driven by a shift towards higher-end products [1]. - The report anticipates that as regulatory policies stabilize, leading companies like Yadea will benefit from industry consolidation and improved sales performance [1]. - The company is expected to see a gradual recovery in sales, with net profit forecasts adjusted to HKD 2.52 billion, HKD 3.02 billion, and HKD 3.60 billion for 2024, 2025, and 2026 respectively [1]. Financial Summary - For 2024, the expected revenue is HKD 31.16 billion, reflecting a 10% decrease, while the net profit is projected at HKD 2.52 billion, a 5% decrease [2]. - The earnings per share (EPS) for 2024 is estimated at HKD 0.86, with a price-to-earnings (P/E) ratio of 12.2 [2]. - The company’s total assets are projected to reach HKD 27.33 billion by 2024, with a debt-to-asset ratio of 60.7% [6].