Toly Bread(603866) Southwest Securities·2024-10-31 03:30Investment Rating - The investment rating for the company is "Hold" [1] Core Views - The company reported a decline in revenue and net profit for the first three quarters of 2024, with revenue at 4.65 billion yuan, down 8.3% year-on-year, and net profit at 440 million yuan, down 5.3% year-on-year [1][2] - Despite the revenue decline, the company's profitability has improved, with a gross margin of 23.8%, up 0.5 percentage points year-on-year, and a net profit margin of 9.4%, up 0.3 percentage points year-on-year [2][3] Revenue Analysis - Revenue from bread and mooncakes for the first three quarters was 4.48 billion yuan (down 7.3%) and 130 million yuan (down 18.1%), respectively, indicating a continued impact from reduced demand and foot traffic in supermarkets [2] - Revenue by region showed declines across all areas, with North China at 1.05 billion yuan (down 9.3%), Northeast at 1.9 billion yuan (down 13%), East China at 1.5 billion yuan (down 4.9%), and South China at 340 million yuan (down 20.5%) [2] Profitability and Cost Management - The company maintained stable expense ratios, with a selling expense ratio of 7.9% (down 0.1 percentage points), a management expense ratio of 2.1% (stable), and a research expense ratio of 0.4% (down 0.1 percentage points) [2] - Financial expenses increased slightly due to higher interest expenses, with a financial expense ratio of 0.5% (up 0.2 percentage points) [2] Capacity and Expansion - The company has established production bases in 22 regions nationwide, with a total capacity of 237,000 tons as of the end of the first half of 2024, and is expanding capacity with new bases under construction [3] - The new capacity is expected to match market demand and expand market share, with an anticipated release of 224,000 tons of new capacity [3] Earnings Forecast - The forecast for net profit for 2024-2026 is 560 million yuan, 620 million yuan, and 660 million yuan, respectively, with corresponding EPS of 0.35 yuan, 0.39 yuan, and 0.41 yuan [3] - The dynamic PE ratios for the same period are projected to be 17 times, 16 times, and 15 times [3]