Eastroc Beverage(SH:605499) Tai Ping Yang·2024-09-03 00:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of 260.28 RMB, compared to the last closing price of 227.94 RMB [1][3]. Core Views - The company has shown strong national expansion momentum, with Q2 performance exceeding expectations. In H1 2024, the company achieved revenue of 7.873 billion RMB, a year-on-year increase of 44.19%, and a net profit of 1.731 billion RMB, up 56.17% year-on-year [2][3]. - Q2 revenue reached 4.391 billion RMB, reflecting a year-on-year growth of 47.88%, with net profit increasing by 74.62% to 1.067 billion RMB [2][3]. - The company is accelerating its national expansion, with over 3.6 million terminal points established across the country, and the introduction of new products is contributing significantly to growth [2][3]. Summary by Sections Financial Performance - In H1 2024, the company reported a revenue of 7.873 billion RMB, a 44.19% increase year-on-year, and a net profit of 1.731 billion RMB, a 56.17% increase year-on-year. Q2 alone saw revenue of 4.391 billion RMB, up 47.88% year-on-year, and net profit of 1.067 billion RMB, up 74.62% year-on-year [2][3]. - The gross margin for H1 2024 improved by 1.5 percentage points to 44.6%, with Q2 gross margin increasing by 3.3 percentage points to 46.05% due to lower raw material prices and enhanced scale effects [2][3]. Product and Market Expansion - The company’s flagship energy drink, Dongpeng Special Drink, generated revenue of 3.75 billion RMB in Q2, a 36.4% year-on-year increase, while other beverages saw a remarkable 193.8% increase in revenue [2][3]. - The new product "Brew Water" has shown rapid growth, with revenue of 480 million RMB year-to-date, a staggering 381.1% increase year-on-year, and is expected to surpass 1 billion RMB for the full year [2][3]. Future Outlook - The company is expected to continue its high growth trajectory, with projected revenues of 15.221 billion RMB, 19.270 billion RMB, and 23.953 billion RMB for 2024, 2025, and 2026 respectively, reflecting growth rates of 35.15%, 26.60%, and 24.31% [4][6]. - The report anticipates that the company will maintain its momentum through further expansion into provincial markets and the introduction of new product lines, including sugar-free tea and coconut juice, enhancing its product matrix [2][3].