ANGEL YEAST(SH:600298) Huachuang Securities·2024-10-31 03:44Investment Rating - The report maintains a "Strong Buy" rating for Angel Yeast (600298) and raises the target price to 44 CNY [1][3]. Core Views - The company reported a revenue of 10.912 billion CNY for the first three quarters of 2024, representing a year-on-year increase of 13.04%. The net profit attributable to shareholders was 0.953 billion CNY, up 4.23% year-on-year [1]. - In Q3 alone, the revenue reached 3.738 billion CNY, a significant increase of 27.14% year-on-year, while the net profit attributable to shareholders was 0.262 billion CNY, up 7.02% year-on-year [1]. - The domestic business continues to improve, and overseas markets maintain high growth, with Q3 revenue growth accelerating. The company added 754 domestic and 175 overseas distributors in Q3 [1]. - The gross margin decreased to 21.35% in Q3, down 3.63 percentage points year-on-year, primarily due to an increase in low-margin business and rising shipping costs [1]. - The company is expected to enter a period of operational growth over the next 2-3 years, supported by overseas expansion and cost reductions [1]. Summary by Sections Financial Performance - For the first three quarters of 2024, total revenue was 10.912 billion CNY, with a year-on-year growth of 13.04%. The net profit attributable to shareholders was 0.953 billion CNY, reflecting a 4.23% increase [1]. - Q3 revenue was 3.738 billion CNY, showing a year-on-year increase of 27.14%, while the net profit attributable to shareholders was 0.262 billion CNY, up 7.02% year-on-year [1]. - The company’s gross margin for Q3 was 21.35%, down 3.63 percentage points year-on-year, attributed to a higher proportion of low-margin businesses and increased shipping costs [1][2]. Market Expansion - The company continues to see improvements in its domestic business while maintaining high growth in overseas markets. In Q3, domestic revenue was 2.27 billion CNY, up 20.7% year-on-year, and overseas revenue was 1.43 billion CNY, up 30.2% year-on-year [1]. - The overseas revenue proportion increased by 1.78 percentage points to 38.72%, benefiting from the expansion of new customers in regions such as the Middle East, Africa, Europe, and Asia-Pacific [1]. Future Outlook - The company is expected to experience operational growth over the next 2-3 years, driven by overseas capacity expansion and cost reductions. The domestic sugar molasses market is anticipated to enter a production increase phase, with prices decreasing significantly [1]. - The company plans to establish a joint venture in Indonesia to enhance its presence in Southeast Asia and is set to issue bonds to support its overseas capacity expansion [1].