Fuling Zhacai(SZ:002507) EBSCN·2024-09-01 08:49Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 1.31 billion yuan for the first half of 2024, a year-on-year decrease of 2.3%, and a net profit attributable to shareholders of 450 million yuan, down 4.7% year-on-year [1] - The revenue from the main product, pickled vegetables, showed a slight increase, while the revenue from radish products significantly declined due to reduced promotional efforts, with sales volume dropping by 53% year-on-year [1] - The company is actively exploring growth opportunities by introducing new products and optimizing its product structure to adapt to changing consumer demands [1][2] Summary by Sections Financial Performance - For the first half of 2024, the company achieved a gross margin of 50.86%, down 2.19 percentage points year-on-year, primarily due to a decrease in vegetable prices [1] - The net profit margin for the first half of 2024 was 34.32%, a decrease of 0.87 percentage points year-on-year [1] - The company plans to adjust its profit forecasts for 2024-2026, with net profit estimates revised to 854 million, 937 million, and 1.015 billion yuan respectively, reflecting a downward adjustment of 8%, 9%, and 10% [1][2] Market Strategy - The company aims to strengthen its market position in pickled vegetables while expanding into potential categories such as green beans and kelp to meet diverse consumer needs [1] - It plans to enhance channel penetration in first- and second-tier cities and continue developing county-level markets, exploring online and restaurant channels [1] - The company has established partnerships with over 100 distributors in the restaurant channel, covering various dining establishments [1] Valuation Metrics - The projected earnings per share (EPS) for 2024-2026 are 0.74, 0.81, and 0.88 yuan, with corresponding price-to-earnings (P/E) ratios of 16x, 15x, and 13x [2][3] - The company’s return on equity (ROE) is expected to be 9.76%, 9.93%, and 9.98% for the years 2024-2026 [2][3]