Eastroc Beverage(SH:605499) Huachuang Securities·2024-09-02 00:03Investment Rating - The report maintains a "Strong Buy" rating for Dongpeng Beverage (605499) with a target price of 250 CNY [2][5]. Core Views - Dongpeng Beverage achieved significant growth in H1 2024, with total revenue of 7.873 billion CNY, up 44.19% year-on-year, and a net profit of 1.731 billion CNY, up 56.17% year-on-year [2][5]. - The company is experiencing robust sales momentum, with Q2 revenue reaching 4.391 billion CNY, a 47.88% increase year-on-year, and net profit of 1.067 billion CNY, a 74.62% increase year-on-year [2][5]. - The report highlights the strong performance of the Dongpeng energy drink line, which saw a 36% increase in sales, and the rapid growth of the "Bushuila" product line, which grew by 281.12% year-on-year [2][5]. - The company is expanding its distribution network, having covered over 3.6 million outlets and nearly 3,000 distributors, which supports its growth strategy [5][6]. Financial Performance Summary - H1 2024 financials show a significant increase in both revenue and profit, with a gross margin of 46.1%, up 3.3 percentage points year-on-year [2][5]. - The report indicates that the company's operating cash flow improved significantly, with a 145.3% increase year-on-year in Q2 [2][5]. - The net profit margin for Q2 2024 was reported at 24.3%, reflecting a 3.7 percentage point increase year-on-year [2][5]. Regional Performance Summary - In Q2 2024, revenue from Guangdong reached 1.193 billion CNY, up 14.99% year-on-year, while other regions showed even higher growth rates, with national revenue increasing by 62.25% [2][9]. - The report notes that the consumer base is expanding, with significant contributions from first- and second-tier cities, indicating a shift in market dynamics [2][5]. Future Outlook - The report projects continued growth for Dongpeng Beverage, with revised earnings forecasts for 2024-2026, estimating net profits of 3.018 billion CNY, 4.020 billion CNY, and 5.050 billion CNY respectively [5][6]. - The company is expected to benefit from ongoing cost reductions and a favorable market environment, positioning it as a leading player in the beverage industry [5][6].