BRIGHT DAIRY(SH:600597) HTSC·2024-09-01 06:03Investment Rating - The report maintains an "Overweight" rating for the company with a target price of RMB 8.41 [6][4]. Core Insights - The company reported a decline in revenue for Q2 2024, with a year-on-year decrease of 10.9%, while the non-recurring net profit margin improved by 14.8% year-on-year [1][3]. - The revenue for H1 2024 was RMB 12.71 billion, a decrease of 10.1% year-on-year, while the net profit attributable to the parent company was RMB 280 million, down 17.0% year-on-year [1][2]. - The company is focusing on quality improvement and efficiency enhancement despite the pressure on liquid milk revenue and significant losses in the livestock segment [1][4]. Revenue Breakdown - For H1 2024, the revenue from liquid milk, other dairy products, and livestock products was RMB 7.23 billion, RMB 4.09 billion, and RMB 600 million, respectively, representing year-on-year changes of -9.7%, -2.3%, and -43.0% [2]. - In Q2 2024, the revenue from liquid milk continued to face pressure, with a year-on-year decline of 5.5% [2]. Profitability Metrics - The gross profit margin for H1 2024 decreased by 0.3 percentage points to 19.8%, with the liquid milk segment facing significant promotional pressures [3]. - The non-recurring net profit margin for H1 2024 increased by 0.5 percentage points to 2.7% [3]. Earnings Forecast - The earnings per share (EPS) forecast for 2024-2026 is projected at RMB 0.32, RMB 0.36, and RMB 0.44, respectively [4][5]. - The report anticipates a target price based on a price-to-earnings (PE) ratio of 26x for 2024, reflecting a downward adjustment from previous estimates [4].