Kouzijiao(603589) KAIYUAN SECURITIES·2024-08-31 16:00Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company's revenue and profit exceeded expectations, demonstrating strong operational resilience [5] - The market has underestimated the company's growth resilience under competitive conditions, with a current dividend yield of around 5% providing a high margin of safety at the current valuation [5] Financial Performance Summary - In H1 2024, the company achieved total operating revenue of 3.17 billion yuan, a year-on-year increase of 8.7%; net profit attributable to shareholders was 950 million yuan, up 11.9% year-on-year [5] - In Q2 2024, total operating revenue was 1.4 billion yuan, a year-on-year increase of 5.9%; net profit attributable to shareholders was 360 million yuan, up 15.2% year-on-year [5] - The company expects net profits for 2024-2026 to be 1.91 billion yuan, 2.08 billion yuan, and 2.28 billion yuan, representing year-on-year growth of 10.9%, 8.9%, and 9.5% respectively [5] Revenue Breakdown - In Q2 2024, high-end liquor revenue was 1.3 billion yuan, up 3.5% year-on-year; mid-range liquor revenue was 13 million yuan, up 4%; and low-end liquor revenue was 27 million yuan, up 16.6% [6] Cash Flow and Margins - Cash flow performance was relatively weak, with a year-on-year decline of 16.3% in revenue plus contract liabilities in Q2 2024, primarily due to a high base from the previous year [7] - Gross margin improved by 4.52 percentage points to 75.04% in Q2 2024, mainly due to a reduction in promotional discounts [8] - The net profit margin increased by 2.06 percentage points to 25.69% in Q2 2024 [8] Valuation Metrics - The current price-to-earnings (P/E) ratios for 2024, 2025, and 2026 are projected to be 11.5, 10.5, and 9.6 times respectively [5] - The company’s return on equity (ROE) is expected to remain stable around 17.7% for 2024 [10]