Toly Bread(SH:603866) Haitong Securities·2024-10-30 01:21Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The company is experiencing pressure on its performance, with a revenue decline of 12.53% year-on-year in Q3 2024. For the first three quarters of 2024, the company achieved a revenue of 4.647 billion yuan, down 8.27% year-on-year, and a net profit attributable to the parent company of 435 million yuan, down 5.28% year-on-year [4][6] - The company is actively working to improve operational quality, enhance customer service capabilities, and develop popular products, with expectations for gradual improvement in operations [6] Financial Performance Summary - In Q3 2024, the company's revenue was 1.627 billion yuan, a decrease of 12.53% year-on-year, with main product revenue from bread at 1.49 billion yuan, down 11.06% year-on-year. The net profit attributable to the parent company was 145 million yuan, down 13.43% year-on-year [4][5] - The gross margin for Q3 2024 was 23.17%, an increase of 0.17 percentage points year-on-year. The overall gross margin for the first three quarters was 23.81%, up 0.51 percentage points year-on-year [5] - The company’s revenue by region showed declines across all areas, with the largest drop in South China at 30.16% year-on-year [5] Earnings Forecast and Valuation - The company’s earnings per share (EPS) for 2024-2026 are projected to be 0.35, 0.38, and 0.44 yuan respectively. The estimated price-to-earnings (PE) ratio for comparable companies in 2024 is between 17-23 times. Given the company's position as an industry leader and expected recovery in consumption, a valuation premium is applied, with a target PE of 20-25 times for 2024, corresponding to a fair value range of 7-8.75 yuan [6][9]