Huangshanghuang(SZ:002695) Great Wall Securities·2024-09-04 02:03Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% relative to the industry index within the next six months [12]. Core Views - The company has experienced a slowdown in store expansion and pressure on single-store revenue, with a focus on improving store quality. The first half of 2024 saw a revenue of 1.06 billion yuan, a year-on-year decrease of 7.53%, and a net profit of 61 million yuan, down 26.59% year-on-year [2][3]. - The company is optimizing its store structure through closures and relocations, which may lead to a temporary slowdown in store expansion while enhancing overall store quality [2]. - The gross margin has improved due to a decrease in raw material prices, with the gross margin for meat products rising by 6.83 percentage points to 36.38% in the first half of 2024 [2]. Financial Summary - The company reported a revenue of 1.92 billion yuan for 2023, with a slight projected increase to 1.92 billion yuan in 2024, followed by 2.19 billion yuan in 2025 and 2.49 billion yuan in 2026, reflecting growth rates of 0.1%, 13.9%, and 13.7% respectively [1][2]. - The net profit is expected to grow from 91 million yuan in 2024 to 115 million yuan in 2025 and 143 million yuan in 2026, with year-on-year growth rates of 29%, 26%, and 24% respectively [2]. - The report highlights an overall gross margin of 32.43% for the first half of 2024, an increase of 4.71 percentage points year-on-year [2]. Operational Insights - As of June 2024, the company operates 4,052 specialty stores, with a reduction of 445 stores since the beginning of the year, indicating a strategic shift towards enhancing store quality over quantity [2]. - The company has increased its marketing and management expenditures, which contributed to the decline in net profit despite the improvement in gross margins [2].