Petpal Tech.(SZ:300673) HTSC·2024-10-23 06:03Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 20.50 [1]. Core Views - The company's revenue for Q3 2024 reached RMB 477 million, representing a year-on-year increase of 13%, while the net profit attributable to the parent company was RMB 57 million, up 320% year-on-year. The significant growth in profitability is driven by the recovery of overseas orders [1][2]. - The main brand, Jueyan, is performing well, with estimated revenue growth of 45% to 55% year-on-year in Q3, supported by strong brand momentum and product advantages [2]. - The gross profit margin improved significantly to 30.9%, an increase of 12.5 percentage points year-on-year, attributed to higher capacity utilization from increased overseas orders and ongoing product upgrades [3]. - The company achieved notable sales during the Double Eleven shopping festival, with Jueyan ranking first in multiple sales categories, indicating strong market presence and potential for growth in the pet industry [4]. Summary by Sections Revenue and Profitability - Q3 2024 revenue was RMB 477 million, up 13% year-on-year; net profit attributable to the parent company was RMB 57 million, up 320% year-on-year; and non-recurring net profit was RMB 56 million, up 336% year-on-year [1]. - The company estimates a revenue growth of 14% to 17% from overseas orders in Q3 2024, while domestic brand Jueyan is expected to grow by 45% to 55% [2]. Financial Metrics - The gross profit margin for Q3 2024 was 30.9%, up 12.5 percentage points year-on-year and 2.9 percentage points quarter-on-quarter [3]. - The company's expense ratios for sales, management, R&D, and financial costs were 5.2%, 6.2%, 1.6%, and 3.7%, respectively, with financial costs increasing due to currency exchange losses [3]. Future Outlook - The company maintains its profit forecast for 2024-2026, expecting net profits of RMB 186.78 million, RMB 204.43 million, and RMB 230.01 million, respectively, with corresponding EPS of RMB 0.75, RMB 0.82, and RMB 0.92 [5]. - The target price of RMB 20.50 is based on a valuation of 25 times the estimated earnings for 2025, reflecting strong export order capabilities and impressive growth from the Jueyan brand [5].