CHINA PET FOODS(002891) Huachuang Securities·2024-10-30 07:00Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 40 CNY per share, compared to the current price of 30.06 CNY [1]. Core Insights - The company reported a revenue of 3.189 billion CNY for the first three quarters of 2024, representing a year-on-year growth of 17.56%. The net profit attributable to the parent company was 282 million CNY, up 59.54% year-on-year. In Q3 2024, revenue reached 1.232 billion CNY, with a year-on-year increase of 23.55%, and net profit of 140 million CNY, growing 73.18% year-on-year [1][2]. - The overseas business growth exceeded expectations, with a nearly 20% increase in Q3, significantly higher than the growth rate in the first half of the year. The company benefited from the expansion in the European market, with export growth around 20%. The U.S. factory's maintenance was completed in September, leading to a slight revenue increase, while the Canadian factory saw substantial growth by taking on U.S. orders. Future capacity increases are anticipated with the second phase of the Canadian factory expected to be operational in the second half of 2025 and the second phase of the U.S. factory in early 2026 [2]. - The company has three major proprietary brands, each showing distinct strengths. The brand "Wang Pi" has improved its core product offerings and profitability. "ZEAL" has upgraded its classic products and launched popular new items, achieving strong market feedback. "Toptrees" has successfully engaged in promotional activities linked to popular IPs, resulting in a 135% year-on-year sales increase in Q3 [2]. - The gross margin showed slight fluctuations, with Q3 gross margin at 26.9%, down 0.4 percentage points year-on-year. Domestic business gross margin improved slightly due to brand structure optimization, while overseas gross margin faced pressure from currency fluctuations and rising raw material prices [2]. - The report projects an increase in earnings per share (EPS) for 2024-2026, adjusting the forecast to 1.21 CNY, 1.47 CNY, and 1.91 CNY respectively, based on Q3 performance and the anticipated capacity increase from the Canadian factory [2][3]. Financial Summary - For 2024, the company is expected to achieve total revenue of 4.559 billion CNY, a year-on-year growth of 21.7%. The net profit attributable to the parent company is projected at 354 million CNY, reflecting a 52% increase year-on-year. The EPS is forecasted to be 1.21 CNY, with a price-to-earnings (P/E) ratio of 25 [3][6].