QIANHE(603027) SINOLINK SECURITIES·2024-10-31 02:50Investment Rating - The report maintains a "Buy" rating for Qianhe Flavor Industry Co., Ltd. (603027.SH) [1][2] Core Views - The company is undergoing channel adjustments and optimizations, with expectations for positive effects to materialize in the future. Despite facing challenges such as weak dining demand and intensified competition, the company is committed to its zero-additive product upgrade strategy [1][2]. Summary by Sections Performance Overview - For Q3 2024, the company reported revenue of 2.288 billion RMB, a year-on-year decrease of 1.85%. The net profit attributable to shareholders was 352 million RMB, down 9.19% year-on-year, while the net profit excluding non-recurring items was 347 million RMB, a decline of 10.25% [1]. Operational Analysis - Revenue decline in Q3 was attributed to high base effects and channel adjustments. The revenue from soy sauce, food coolers, and other businesses in Q3 2024 was 430 million RMB, 84 million RMB, and 136 million RMB, respectively, with year-on-year declines of 13.8%, 15.6%, and 30.3% [1]. - The company reduced its number of distributors by 136 in Q3, with significant reductions in central and western regions. The revenue from distribution and direct sales fell by 17.3% and 0.4% year-on-year, respectively [1]. - The company's gross margin improved to 37.54%, an increase of 0.67 percentage points year-on-year, primarily due to lower raw material prices and price optimization [1]. Financial Forecasts - The report projects a 7% reduction in earnings estimates for 2024-2026 due to increased market competition and short-term channel adjustments. Expected net profits for 2024-2026 are 520 million RMB, 590 million RMB, and 670 million RMB, reflecting a year-on-year change of -1%, +12%, and +14%, respectively [2][5]. - The corresponding price-to-earnings ratios are projected to be 24x, 22x, and 19x for the same periods [2].