Fuling Zhacai(002507) 国泰君安·2024-09-01 09:31Investment Rating - Maintain "Overweight" rating [1] - Target price lowered to CNY 14.2 from CNY 19.55 [1] Core Views - Performance below expectations due to weak demand [1] - Revenue in H1 2024 was CNY 1.306 billion, down 2.32% YoY [1] - Net profit attributable to shareholders in H1 2024 was CNY 448 million, down 4.17% YoY [1] - Q2 2024 revenue was CNY 557 million, down 3.32% YoY [1] - Q2 2024 net profit attributable to shareholders was CNY 177 million, down 15.58% YoY [1] Product Performance - Pickled mustard revenue increased 0.49% YoY in H1 2024 [1] - Radish revenue decreased 39.42% YoY in H1 2024 [1] - Pickled vegetable revenue decreased 6.24% YoY in H1 2024 [1] Profitability - Gross margin in H1 2024 was 50.86%, down 2.19 pct YoY [1] - Net margin in H1 2024 was 34.32%, down 0.87 pct YoY [1] - Q2 2024 gross margin increased 0.38 pct YoY but decreased 2.93 pct QoQ [1] Channel and Product Expansion - Number of distributors decreased by 424 to 2,815 in H1 2024 due to market order optimization [1] - Increased focus on new seasoning sauce products starting 2024 [1] - Successfully entered top catering brands with customized channel expansion [1] Financial Forecast - 2024-2026 EPS forecast adjusted to CNY 0.71/0.78/0.81, down from CNY 0.79/0.91/1.01 [1] - 2024-2026 revenue forecast: CNY 2.434/2.565/2.723 billion [2] - 2024-2026 net profit forecast: CNY 822/895/938 million [2] Valuation - 2024 PE ratio: 20X [1] - Current PE ratio: 16.63 [2] - Current PB ratio: 1.56 [2] Market Performance - 52-week stock price range: CNY 11.73-16.41 [3] - Current market cap: CNY 13.674 billion [3] - Total shares outstanding: 1.154 billion [3] Industry Comparison - Comparable companies: Haitian Flavoring, Qianhe Flavoring, Tianwei Food, Yili Group [1] - Average PE ratio of comparable companies: 25X [8]