千禾味业：战略调整，经营承压，期待改善

Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 15.68 [6][4]. Core Views - The company is experiencing short-term revenue pressure due to weak external demand and a reduction in scale effects, leading to a decline in profitability. However, there is an expectation for gradual improvement in operations as new products gain traction and new distribution points are developed [1][2]. - The company is focusing on product optimization and upgrading, which is anticipated to drive revenue and profit growth in the second half of 2024. The forecasted EPS for 2024-2026 is RMB 0.56, 0.65, and 0.74 respectively, with a reference PE of 28x for 2024 [1][4]. Summary by Sections Revenue and Profitability - In the first half of 2024, the company's revenue was RMB 1.59 billion, with a net profit attributable to the parent company of RMB 250 million, reflecting a year-on-year growth of 3.8% but a decline in net profit by 2.4% [1]. - For Q2 2024, revenue was RMB 690 million, with a net profit of RMB 100 million, showing a year-on-year decrease of 2.5% in revenue and 14.2% in net profit [1][2]. - The gross profit margin for Q2 2024 was 35.2%, down 2.3 percentage points year-on-year, attributed to reduced scale effects despite lower raw material costs [3]. Product and Market Strategy - The company is strategically upgrading its product line, focusing on low-additive products priced around RMB 7 and mid-range products around RMB 10, which has led to short-term revenue pressure due to inventory management of older products [2]. - The company has seen a net increase of 204 distributors by the end of Q2 2024, indicating ongoing efforts in recruitment and network expansion [2]. Financial Projections - The projected revenue for 2024 is RMB 3.422 billion, with a net profit of RMB 580 million, reflecting a growth rate of 6.71% and 9.42% respectively [5]. - The company’s PE ratio is expected to decrease from 26.10 in 2023 to 23.85 in 2024, indicating a more favorable valuation outlook [5].