Yanghe(002304) 太平洋·2024-09-01 09:20Investment Rating - Buy/Upgrade rating with a target price of 102.6 RMB, compared to the previous closing price of 77.24 RMB [1] Core Views - Short-term performance pressure but a commitment to shareholder returns with a minimum dividend of 7 billion RMB annually from 2024 to 2026 [1][3] - Revenue growth of 4.58% YoY in H1 2024, with net profit attributable to shareholders increasing by 1.08% YoY [3] - Product structure slightly shifted downward, with mid-to-high-end liquor revenue growing by 4.78% YoY and ordinary liquor revenue growing by 5.16% YoY [3] - Regional performance shows slower growth in the domestic market (+1.42% YoY) compared to the external market (+7.50% YoY) [3] - Increased expense investment in Q2 2024, leading to a decline in net profit margin to 28.58% [3] - The company aims for a 5%-10% revenue growth in 2024, focusing on deepening its domestic market and expanding nationally [3] Financial Performance Summary - H1 2024 revenue: 22.876 billion RMB (+4.58% YoY), net profit: 7.947 billion RMB (+1.08% YoY) [3] - Q2 2024 revenue: 6.621 billion RMB (-3.02% YoY), net profit: 1.892 billion RMB (-9.75% YoY) [3] - Gross margin in H1 2024: 75.4% (-0.8 pct YoY), Q2 gross margin: 73.7% (-1.4 pct YoY) [3] - Contract liabilities at the end of Q2 2024: 3.938 billion RMB, a decrease of 18.8% QoQ and 13.9% YoY [3] Product and Market Strategy - Mid-to-high-end liquor revenue: 19.961 billion RMB (+4.78% YoY), gross margin: 79.40% (-1.37 pct YoY) [3] - Ordinary liquor revenue: 2.530 billion RMB (+5.16% YoY), gross margin: 49.82% (+2.76 pct YoY) [3] - Focus on stabilizing the price of M6+ and limiting the supply of Handmade Class products [3] - Domestic market strategy: Optimizing the dealer system, with 2,942 dealers at the end of Q2 2024 [3] - External market strategy: Increasing penetration, with 5,891 dealers at the end of Q2 2024 [3] Financial Forecasts - Expected revenue growth for 2024-2026: 5%/7%/6% [3] - Expected net profit growth for 2024-2026: 3%/8%/7% [3] - EPS for 2024-2026: 6.84/7.41/7.93 RMB, with PE ratios of 11x/10x/10x [3] - Dividend yield based on current market value: 6% [3] Valuation and Target Price - Target price adjusted to 102.60 RMB based on 2024 performance, with a 15x PE ratio [3] - Current PE ratio: 11x for 2024, 10x for 2025 and 2026 [3]