Juewei Food (603517) 国泰君安·2024-10-31 09:16Investment Rating - The report maintains a "Buy" rating for Juewei Foods (603517) [2][5]. Core Views - The performance of Juewei Foods meets expectations, with improving profit margins. However, the earnings forecast has been lowered due to a higher-than-expected store closure rate. The target price has been raised to 23.32 CNY from 15.51 CNY, reflecting a valuation premium based on comparable company valuations and expectations of consumer recovery and a potential second growth curve [2][3]. Financial Summary - Revenue for 3Q24 was 1.675 billion CNY, down 13.29% year-on-year. The net profit attributable to shareholders was 143 million CNY, down 3.33% year-on-year, while the net profit excluding non-recurring items was 143 million CNY, up 2.11% year-on-year [3][4]. - The gross margin for 3Q24 was 31.12%, an increase of 5.35 percentage points year-on-year, and the net profit margin was 8.53%, up 1.29 percentage points year-on-year [3][4]. - The earnings per share (EPS) forecast for 2024, 2025, and 2026 has been adjusted to 0.81 CNY, 0.90 CNY, and 1.01 CNY, respectively, down from previous estimates of 0.93 CNY, 1.00 CNY, and 1.11 CNY [3][4]. Market Data - The current stock price is 17.98 CNY, with a target price of 23.32 CNY, indicating significant upside potential [5][6]. - The stock has a market capitalization of 11.146 billion CNY and a price-to-earnings (P/E) ratio of 23.16 for 2024 [4][6]. Investment Outlook - The report highlights that the second growth curve is still expanding, with investments in companies like Liaoji continuing to open new stores, although profitability remains under pressure [3][4]. - The overall investment income has been impacted by macroeconomic pressures, leading to a reported loss in investment income for the first nine months of the year [3].