Perfect(603059) 天风证券·2024-09-03 13:08Investment Rating - The investment rating for the company is "Buy" with a target price set at 20.34 CNY, maintaining the rating for the next six months [2]. Core Insights - The company reported a revenue of 330 million CNY in Q2 2024, representing a year-on-year increase of 28.9%. However, the net profit attributable to the parent company decreased by 51.7% to 14 million CNY [2]. - For the first half of 2024, the company achieved a revenue of 620 million CNY, up 28.6% year-on-year, while the net profit attributable to the parent company was 33 million CNY, down 9.4% [2]. - The growth in revenue is attributed to increased sales of oral care products and the addition of probiotic sales from a recent acquisition [2]. - The company has a production capacity of 672 million toothbrushes and 18 billion wet wipes annually, holding significant positions in the oral care and disposable hygiene products sectors [5]. Financial Performance - In H1 2024, the toothbrush segment generated 250 million CNY in revenue, a 20.2% increase, accounting for 40.4% of total revenue. The wet wipes segment generated 200 million CNY, up 32.6%, making up 32.2% of total revenue [2]. - The company's gross margin for H1 2024 was 25.3%, an increase of 2.6 percentage points year-on-year, while the net profit margin was 5.3%, down 2.2 percentage points [2]. - The company’s international revenue reached 380 million CNY in H1 2024, a significant increase of 112% year-on-year, representing 61.6% of total revenue, while domestic revenue was 240 million CNY, down 21.2% [2]. Industry Overview - The oral care industry in China is projected to grow at a compound annual growth rate (CAGR) of 3.75% from 2023 to 2028, with rapid development in new categories such as mouth sprays and electric toothbrushes [3]. - The wet wipes market in China has shown consistent growth, increasing from 6.74 billion CNY in 2017 to 11.6 billion CNY in 2023, with an expected CAGR of 9.46% [3]. - The probiotic market in China reached a scale of 118.85 billion CNY in 2023, with a CAGR of 11.8% from 2019 to 2023, and is expected to continue growing steadily [3]. Strategic Developments - The company is pursuing both organic growth and external expansion strategies. In April 2024, it acquired a 52% stake in a company named Shan'enkang, which will be consolidated into its financial statements [4]. - The company’s subsidiary, Nanjing Lunjie, successfully bid for a 1.59% stake in Weimeizi, which will increase its total ownership to approximately 33.9%, enhancing supply chain collaboration [4]. Earnings Forecast - The earnings forecast for the company has been adjusted, with expected net profits for 2024, 2025, and 2026 projected at 110 million CNY, 140 million CNY, and 190 million CNY respectively [5][6].