Juewei Food (SH:603517) ZHONGTAI SECURITIES·2024-10-27 08:15Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is experiencing continuous revenue pressure, but cost advantages are being sustained. The report anticipates a gradual recovery in gross margins due to declining raw material prices and increased promotional activities [1][6] - The company has adjusted its profit forecasts downward due to ongoing same-store sales pressure and increased marketing expenditures, with expected EPS for 2024-2026 being 0.91, 1.02, and 1.14 respectively [1][6] Financial Performance Summary - Revenue (in million CNY): - 2022A: 6,623 - 2023A: 7,261 - 2024E: 6,530 (down 10% YoY) - 2025E: 6,749 (up 3% YoY) - 2026E: 7,037 (up 4% YoY) [1] - Net Profit (in million CNY): - 2022A: 233 - 2023A: 344 - 2024E: 572 (up 66% YoY) - 2025E: 642 (up 12% YoY) - 2026E: 716 (up 12% YoY) [1] - Earnings Per Share (in CNY): - 2022A: 0.37 - 2023A: 0.55 - 2024E: 0.91 - 2025E: 1.02 - 2026E: 1.14 [1] - Gross Margin: The gross margin is expected to improve due to cost reductions, with a projected increase in gross margin percentage to 30.56% in Q3 2024 [1][6] Market and Product Performance - The company’s fresh product revenue has seen a significant decline, while packaged products are experiencing rapid growth. In Q3 2024, fresh products generated revenue of 12.56 billion CNY, a year-on-year decrease of 15.99% [1] - The report highlights that the company’s promotional efforts have led to an increase in sales expense ratio, which rose by 5.35 percentage points to 31.12% in Q3 2024 [1][6] Cash Flow and Financial Ratios - Operating Cash Flow (in million CNY): - 2023A: 420 - 2024E: 918 - 2025E: 887 - 2026E: 957 [4] - Debt Ratios: The report indicates a debt-to-equity ratio and other solvency metrics that suggest a stable financial position, with total liabilities projected to be 3,125 million CNY in 2024 [5][6] Conclusion - The report suggests that despite the challenges faced in revenue growth and same-store sales, the company is positioned to benefit from cost reductions and improved gross margins, maintaining a "Buy" rating for potential investors [1][6]