Eastroc Beverage(SH:605499) HTSC·2024-08-31 10:08Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 263.52 [1]. Core Insights - The company has shown strong growth momentum, with 24H1 revenue and net profit increasing by 44.2% and 56.2% year-on-year, respectively. The second quarter of 2024 also demonstrated robust performance, with revenue and net profit growing by 47.9% and 74.6% year-on-year [2][3]. - The company's flagship product, Dongpeng Special Drink, continues to perform well, achieving revenue of RMB 68.5 billion in H1 2024, a year-on-year increase of 33.5%. The new product line "Bushuila" is expected to contribute significantly to revenue growth [2][3]. - The gross profit margin improved by 1.5 percentage points to 44.6% in H1 2024, driven by cost reductions and economies of scale [4]. Summary by Sections Financial Performance - In H1 2024, the company reported revenue of RMB 78.7 billion, net profit attributable to the parent company of RMB 17.3 billion, and net profit excluding non-recurring items of RMB 17.1 billion, reflecting year-on-year growth of 44.2%, 56.2%, and 72.3%, respectively [2]. - For Q2 2024, revenue reached RMB 43.9 billion, with net profit attributable to the parent company at RMB 10.7 billion, marking a year-on-year increase of 47.9% and 74.6% [2]. Product Performance - Dongpeng Special Drink and other beverages achieved revenues of RMB 68.5 billion and RMB 10.1 billion in H1 2024, representing year-on-year growth of 33.5% and 214.7%, respectively [3]. - The new product "Bushuila" is expected to exceed the annual sales target of RMB 1 billion due to strong channel replenishment and rapid expansion [3]. Cost and Profitability - The gross profit margin for H1 2024 was 44.6%, an increase of 1.5 percentage points year-on-year, attributed to favorable cost conditions and rapid revenue growth [4]. - The net profit margin for H1 2024 increased by 1.7 percentage points to 22.0%, with Q2 2024 showing a further increase of 3.7 percentage points to 24.3% [4]. Future Outlook - The company is expected to maintain strong growth momentum, with projected EPS of RMB 7.32, RMB 9.53, and RMB 12.10 for 2024, 2025, and 2026, respectively [5]. - The target price of RMB 263.52 reflects a PE ratio of 36x for 2024, considering a net profit CAGR of 33% from 2024 to 2026, which is significantly higher than the average of comparable companies [5].