Sichuan Teway Food (SH:603317) Huafu Securities·2024-09-01 08:17Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the market benchmark within the next six months [9]. Core Views - The company reported a revenue of 1.468 billion yuan for H1 2024, a year-on-year increase of 2.95%, and a net profit of 247 million yuan, up 18.79% year-on-year. However, Q2 revenue was 614 million yuan, down 6.80% year-on-year, indicating pressure on demand and increased competition [1][3]. - The company is facing significant growth pressure in its main products, particularly hot pot and Chinese cuisine seasonings, while online channels continue to show high growth [2][3]. - The company has introduced new health-oriented products in H1 2024, which may help improve performance in the second half of the year [2][3]. Summary by Sections Financial Performance - H1 2024 revenue was 1.468 billion yuan, with a net profit of 247 million yuan. Q2 saw a decline in revenue and net profit, with figures of 614 million yuan and 71 million yuan respectively [1]. - The gross margin for Q2 was 33.33%, an increase of 2.19 percentage points year-on-year, attributed to lower raw material prices and product mix optimization [3]. Product and Channel Analysis - In Q2, revenue from hot pot seasonings decreased by 22.94%, while Chinese cuisine seasonings grew by 4.75%. Other products, including sausage and cured meat seasonings, saw a significant decline of 87.36% [2]. - Online sales grew by 57.37% year-on-year in Q2, contrasting with a 15.32% decline in offline sales [2]. Regional Performance - Q2 revenue changes by region showed a decline in the northern region by 29.21%, while the eastern and southern regions experienced smaller declines of 5.77% and 0.42% respectively [2]. Profitability and Cost Management - The company’s net profit margin for Q2 was 11.53%, down 0.53 percentage points year-on-year, while the non-recurring net profit margin increased by 1.24 percentage points to 10.26% [3]. - Cost management improved, with total expense ratios decreasing by 1.22 percentage points in Q2 [3]. Future Outlook - The company anticipates a potential improvement in performance during the second half of 2024, driven by seasonal demand and new product launches [3]. - Profit forecasts for 2024-2026 have been adjusted downwards, with expected net profits of 545 million yuan, 632 million yuan, and 721 million yuan respectively, reflecting a growth rate of 19%, 16%, and 14% [3].