Eastroc Beverage(SH:605499) SINOLINK SECURITIES·2024-09-01 03:41Investment Rating - The report maintains a "Buy" rating for the company [2][3]. Core Views - The company achieved a revenue of 7.873 billion RMB in H1 2024, representing a year-on-year increase of 44.19%, and a net profit attributable to shareholders of 1.731 billion RMB, up 56.17% year-on-year [2]. - In Q2 2024, the company reported revenue of 4.391 billion RMB, a 47.88% increase year-on-year, and a net profit of 1.067 billion RMB, which is a 74.62% increase year-on-year, aligning with the upper limit of previous forecasts [2]. - The expansion of the consumer base for functional beverages and the unexpected growth in electrolyte water contributed significantly to the performance [2]. Summary by Sections Business Performance - The revenue from functional beverages in Q2 2024 was 3.754 billion RMB, a 36.4% increase year-on-year, driven by an increase in consumer reach and drinking frequency [2]. - Revenue from distribution and direct sales channels in Q2 2024 was 3.735 billion RMB and 521 million RMB, respectively, with year-on-year increases of 43.3% and 78.4% [2]. - The number of terminal outlets increased to 3.6 million, a 6% increase from the end of 2023 [2]. - Revenue growth in key regions such as East China and Southwest China was particularly strong, with increases of 58.1% and 80.6% year-on-year, respectively [2]. Financial Metrics - The gross margin and net margin for Q2 2024 were 46.05% and 24.29%, respectively, reflecting improvements of 3.3 and 3.72 percentage points year-on-year [2]. - The increase in gross margin was attributed to accelerated sales of electrolyte water and the release of scale effects [2]. - The company’s contract liabilities stood at 2.501 billion RMB, accounting for 31.77% of sales revenue, a decrease of 2.14 percentage points year-on-year [2]. Future Outlook - The company is expected to achieve net profits of 2.91 billion RMB, 3.73 billion RMB, and 4.66 billion RMB for the years 2024 to 2026, representing year-on-year growth rates of 43%, 28%, and 25%, respectively [2]. - The report highlights the potential for continued high growth in performance, supported by the expansion of the functional beverage market and the development of new product lines such as sugar-free tea and coconut juice [2].