Zhongjing Food(SZ:300908) CHINA DRAGON SECURITIES·2024-10-23 09:00Investment Rating - The investment rating for the company is "Buy" with an initial coverage recommendation [1][2]. Core Views - The company has shown a revenue growth of 9.57% year-on-year in Q3 2024, achieving a total revenue of 301 million yuan. However, the net profit attributable to shareholders decreased by 2.97% year-on-year to 49 million yuan [1]. - For the first three quarters of 2024, the company reported a revenue of 839 million yuan, representing a year-on-year growth of 14.21%, while the net profit attributable to shareholders increased by 6.57% to 149 million yuan [1]. - The company is a leader in the supercritical extraction of spices and has continuously launched new products, including garlic sauce and pepper sauce, to meet the health-conscious consumer trend [1][2]. Financial Performance Summary - In Q3 2024, the company's gross margin and net margin were 40.94% and 16.25%, respectively, showing a decline of 2.22 percentage points and 2.10 percentage points year-on-year due to rising raw material costs [1]. - The company plans to distribute a cash dividend of 2 yuan per 10 shares to all shareholders, totaling 29.2 million yuan [1]. - The projected revenues for 2024, 2025, and 2026 are 1.141 billion yuan, 1.312 billion yuan, and 1.514 billion yuan, with corresponding growth rates of 14.74%, 15.04%, and 15.35% [2][4]. Valuation Metrics - The projected earnings per share (EPS) for 2024, 2025, and 2026 are 1.27 yuan, 1.41 yuan, and 1.60 yuan, with price-to-earnings (P/E) ratios of 22.5X, 20.2X, and 17.9X, respectively [2][3]. - The company’s return on equity (ROE) is expected to improve from 10.51% in 2024 to 12.20% in 2026 [5].