Toly Bread(SH:603866) Huachuang Securities·2024-10-29 04:15Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 7 CNY, while the current price is 6.47 CNY [1]. Core Views - The company reported a revenue of 4.647 billion CNY for the first three quarters of 2024, a year-on-year decrease of 8.27%. The net profit attributable to the parent company was 435 million CNY, down 5.28% year-on-year [1]. - In Q3 alone, the revenue was 1.627 billion CNY, reflecting a 12.53% decline year-on-year, with a net profit of 145 million CNY, down 13.43% year-on-year [1]. - The company faces external pressures, with a significant drop in demand and increased competition affecting its core bread business, alongside a decline in foot traffic in supermarkets [1]. - Despite the revenue decline, the gross profit margin improved to 23.17% in Q3, up 0.17 percentage points year-on-year, attributed to stable raw material costs and strict control over return rates [1]. - The company is shifting its focus from expansion to operational quality, actively managing return rates and seeking partnerships in emerging markets [1]. - The report adjusts the EPS forecast for 2024-2026 to 0.37, 0.39, and 0.43 CNY respectively, with corresponding PE valuations of 17, 16, and 15 times [1]. Financial Summary - Total revenue for 2023 is projected at 6.759 billion CNY, with a year-on-year growth rate of 1.1%. For 2024, revenue is expected to decline by 7.5% to 6.25 billion CNY [2]. - The net profit for 2023 is estimated at 574 million CNY, with a slight increase of 3.4% expected in 2024, reaching 594 million CNY [2]. - The company’s PE ratio is projected to decrease from 18 times in 2023 to 15 times by 2026 [2]. - The gross profit margin is expected to improve gradually from 22.8% in 2023 to 24.4% in 2026 [8].