ZUO LI YAO YE(SZ:300181) EBSCN·2024-10-28 04:11Investment Rating - The report maintains a "Buy" rating for the company [1][2] Core Views - The company reported significant revenue and profit growth in Q3 2024, with operating revenue, net profit attributable to shareholders, and net profit excluding non-recurring items reaching 2.045 billion, 421 million, and 415 million yuan respectively, representing year-on-year increases of 39.59%, 46.93%, and 47.80% [1] - The company continues to benefit from the high demand for essential medicines and centralized procurement policies, with strong sales performance in its key products [2] - The implementation of stock incentive and employee shareholding plans reflects the company's confidence in future growth, with performance targets exceeding market expectations [1][2] Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved quarterly revenues of 673 million, 755 million, and 617 million yuan, with year-on-year growth rates of 35.75%, 46.45%, and 35.97% respectively [1] - The net profit attributable to shareholders for the same period was 142 million, 154 million, and 125 million yuan, with year-on-year growth rates of 46.14%, 53.32%, and 40.61% [1] - The company’s gross margin decreased by 7.04 percentage points year-on-year to 39.39%, attributed to the expansion of centralized procurement for certain products [1] Growth Drivers - The sales of key products such as Wuling capsules and Lingze tablets showed strong growth, with year-on-year increases of 28.86% and 30.84% respectively [1] - The company is expanding its market presence in traditional Chinese medicine and has seen rapid growth in its herbal pieces and formula granules, with revenue increases of 51.24% and 175.96% year-on-year [1] Profitability and Efficiency - The net profit margin increased by 1.03 percentage points year-on-year to 20.61%, driven by significant revenue growth and effective cost control measures [1] - The company’s inventory turnover days decreased by 55.74 days year-on-year, and accounts receivable turnover days decreased by 3.41 days, indicating improved operational efficiency [1] Future Outlook - The company forecasts a net profit of 547 million yuan for 2024, with upward adjustments for 2025 and 2026 to 688 million and 885 million yuan respectively, reflecting a year-on-year growth of 43%, 26%, and 29% [2] - The current stock price corresponds to a price-to-earnings ratio of 21, 16, and 13 for the years 2024, 2025, and 2026 respectively, supporting the "Buy" rating [2]