Sichuan Teway Food (SH:603317) Huaxin Securities·2024-10-27 01:30Investment Rating - The report maintains a "Buy" investment rating for Tianwei Foods (603317.SH) [1][2] Core Views - The company's profitability has been boosted by cost optimization, and the food segment continues to show high growth [1] - Revenue for Q1-Q3 2024 reached 2.364 billion yuan, a year-on-year increase of 6%, with net profit attributable to shareholders reaching 432 million yuan, up 35% year-on-year [1] - The third quarter of 2024 saw revenue of 897 million yuan, an 11% year-on-year increase, driven by inventory replenishment [1] Summary by Sections Financial Performance - The company achieved a gross profit margin increase of 1 percentage point to 38.83% in Q3 2024, attributed to changes in product/channel structure [1] - Selling and administrative expense ratios decreased by 8 percentage points and 1 percentage point to 7.81% and 5.19%, respectively, due to direct discounts on manual series products and a reduction in equity incentive expenses [1] - The net profit margin increased by 7 percentage points to 21.19% [1] Market Position - The market share of hot pot condiments continues to rise, with Q3 2024 revenue from hot pot seasonings at 303 million yuan, a 1% year-on-year increase [1] - The company is focusing on flavor enhancement and high-end brand positioning during the industry's consolidation phase [1] - Revenue from Chinese-style condiments in Q3 2024 was 385 million yuan, an 18% year-on-year increase, with a focus on regional new product development [1] Channel Performance - Offline channel revenue in Q3 2024 was 756 million yuan, a 6% year-on-year increase, while online channel revenue reached 139 million yuan, a 55% year-on-year increase [1] - The company has 3,129 distributors as of the end of Q3 2024, a net decrease of 36 from the beginning of the year [1] - The food segment's strategy remains focused on online channels, with successful new product launches and improved performance [1] Earnings Forecast - The company is expected to maintain its leadership in the condiment sector, with projected EPS of 0.49, 0.56, and 0.60 yuan for 2024, 2025, and 2026, respectively [4][5] - The current stock price corresponds to a PE ratio of 28/24/23 for the respective years [2]