Fuling Zhacai(002507) 华创证券·2024-10-30 04:40Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 15.8 CNY, while the current price is 14.60 CNY [1][2]. Core Views - The company has shown a gradual shift towards change, with expectations for accelerated transformation. The revenue for the first three quarters of 2024 reached 1.96 billion CNY, a year-on-year increase of 0.6%, while the net profit attributable to shareholders was 670 million CNY, up 1.7% year-on-year [1][2]. - In Q3 alone, revenue was 657 million CNY, reflecting a 6.8% year-on-year growth, and net profit attributable to shareholders was 223 million CNY, an increase of 17.9% year-on-year [1][2]. Financial Performance Summary - The company reported a gross margin of 56.2% in Q3, which is an increase of 10.5 percentage points year-on-year, primarily due to the confirmation of low-cost raw materials purchased earlier in the year [2]. - The sales expense ratio increased to 17.2%, up 5.5 percentage points year-on-year, attributed to heightened marketing investments starting from June [2]. - The net profit margin for Q3 was 33.9%, an increase of 3.2 percentage points year-on-year [2]. Future Outlook - The company is expected to continue its positive momentum into the first half of 2025, driven by a new management team that is actively addressing market challenges and enhancing marketing strategies [2]. - The report emphasizes the importance of maintaining market share and the potential for mid-term growth if new product strategies are effectively implemented [2]. Financial Projections - The projected total revenue for 2024 is 2.495 billion CNY, with a year-on-year growth rate of 1.8% [3]. - The estimated earnings per share (EPS) for 2024 is 0.74 CNY, with a price-to-earnings (P/E) ratio of 20 [3].