CHINA PET FOODS(SZ:002891) EBSCN·2024-10-22 12:43Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 29.76 CNY [4]. Core Views - The company achieved record high performance in Q3 2024, with a revenue of 3.19 billion CNY for the first three quarters, representing a year-on-year increase of 17.6%. The net profit attributable to shareholders reached 280 million CNY, up 59.5% year-on-year [1]. - The introduction of an employee stock ownership plan reflects the company's confidence in its long-term development, with a target revenue of 4.43 billion CNY for 2024, indicating a growth rate of 17.44% [2]. - The report highlights the company's strategic adjustments in product structure and pricing control, which have positively impacted gross margins and profitability [1][2]. Summary by Sections Financial Performance - For Q3 2024, the company reported a revenue of 1.23 billion CNY, a 23.6% increase year-on-year, and a net profit of 140 million CNY, up 73.2% year-on-year [1]. - The gross margin for the first three quarters of 2024 was 27.55%, with a slight decrease in Q3 to 26.89% [1]. - The net profit margin for Q3 reached 11.97%, an increase of 2.01 percentage points year-on-year, primarily driven by increased investment income [1]. Employee Stock Ownership Plan - The employee stock ownership plan involves up to 62 employees, including 8 directors and executives, with a total stock amount not exceeding 1.52% of the total share capital [2]. - The plan sets reasonable performance targets for domestic and international business revenues, aiming for a net profit of 300 million CNY in 2024, reflecting a growth rate of 28.6% [2]. Earnings Forecast and Valuation - The report revises the net profit forecasts for 2024-2026 to 348 million CNY, 391 million CNY, and 474 million CNY, respectively, with corresponding growth rates of 16%, 11%, and 6% [2]. - The current stock price corresponds to a P/E ratio of 25x for 2024, 22x for 2025, and 18x for 2026 [2].