Zhejiang Meida(002677) 华泰证券·2024-09-02 00:03Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 8.40 [1][6]. Core Insights - The company faced significant pressure in H1 2024, with revenue and net profit declining by 40.56% and 55.26% year-on-year, respectively, primarily due to the downturn in the real estate sector [1][2]. - The integrated stove industry is expected to continue facing challenges, leading to a downward adjustment in the company's EPS forecasts for 2024-2026 [1][14]. - The company is actively adjusting its marketing strategies and expanding its distribution channels to mitigate the impact of the market downturn [2][4]. Financial Performance - In H1 2024, the company achieved revenue of RMB 459 million and a net profit of RMB 97.56 million, with Q2 figures showing a more severe decline of 57.09% in revenue and 82.62% in net profit [1][2]. - The gross margin decreased to 44.32% in H1 2024, down from 46.76% in H1 2023, while the net profit margin also saw a decline [3][10]. - The company’s operating expenses increased, with the expense ratio rising by 5.20 percentage points year-on-year in H1 2024 [3][10]. Market Strategy - The company is focusing on expanding its market presence and enhancing its product offerings to capture market share despite the industry downturn [4][5]. - It has over 1,900 high-quality primary distributors and more than 4,700 marketing terminals, indicating a robust distribution network [2][4]. Earnings Forecast - The revenue forecast for 2024 is adjusted to RMB 945.15 million, reflecting a 43.49% decline, with a gradual recovery expected in subsequent years [5][14]. - The net profit forecast for 2024 is set at RMB 266.65 million, with a compound annual growth rate projected for 2024-2026 [5][14].