Yanghe(002304) 光大证券·2024-09-01 11:11Investment Rating - The report maintains a "Buy" rating for the company, citing high dividend yield as a key attraction despite slowing earnings growth [3][5] Core Views - The company's Q2 performance was under pressure, with revenue declining 3.02% YoY and net profit dropping 9.75% YoY [2] - The company announced a cash dividend payout plan, committing to a minimum 70% payout ratio and at least 7 billion RMB annually from 2024-2026 [2] - Despite short-term challenges, the company's high dividend yield (around 6%) provides a safety margin and makes it attractive from a dividend perspective [3] Financial Performance Revenue and Profit - H1 2024 total revenue reached 22.876 billion RMB, up 4.58% YoY, with net profit of 7.947 billion RMB, a 1.08% increase [2] - Q2 2024 revenue was 6.621 billion RMB, down 3.02% YoY, with net profit of 1.892 billion RMB, a 9.75% decline [2] - The company's mid-to-high-end products contributed 19.96 billion RMB in H1, up 4.78% YoY [2] Regional Performance - Domestic revenue in H1 was 9.6 billion RMB (+1.42% YoY), while out-of-province revenue grew 7.50% to 12.9 billion RMB [2] - The company has 2,942 domestic and 5,891 out-of-province distributors, with a net increase of 62 out-of-province dealers [2] Profitability and Valuation - Q2 2024 gross margin was 73.67%, down 1.4 percentage points YoY [3] - The company's P/E ratio is projected at 11x for 2024 and 10x for 2026 [4] - ROE is expected to decline slightly from 19.28% in 2023 to 17.85% in 2026 [4] Cash Flow and Balance Sheet - Q2 2024 operating cash flow was -2.81 billion RMB, compared to -1.14 billion RMB in Q2 2023 [3] - Contract liabilities decreased by 1.88 billion RMB to 3.94 billion RMB at the end of Q2 [3] - The company's cash position is expected to grow from 25.813 billion RMB in 2023 to 40.974 billion RMB in 2026 [8] Future Projections - Revenue is forecast to grow from 34.661 billion RMB in 2024E to 39.265 billion RMB in 2026E [4] - Net profit is projected to increase from 10.208 billion RMB in 2024E to 11.591 billion RMB in 2026E [4] - EPS is expected to rise from 6.78 RMB in 2024E to 7.69 RMB in 2026E [4]