YINGJIA DISTILLERY(603198) Tai Ping Yang·2024-10-31 10:43Investment Rating - The report maintains a "Buy" rating for the company with a target price of 76.80, compared to the last closing price of 63.53 [1][5]. Core Views - The company reported a Q3 performance that was below expectations, with a strategy to slow down growth to maintain healthy development ahead of the Spring Festival [1]. - For the first three quarters of 2024, the company achieved revenue of 5.513 billion, a year-on-year increase of 13.8%, and a net profit of 2.006 billion, up 20.2% year-on-year [1]. - In Q3 2024, revenue was 1.711 billion, reflecting a year-on-year growth of 2.3%, while net profit was 625 million, up 2.9% year-on-year [1]. Financial Summary - Revenue projections for the company are as follows: 2024E at 7.618 billion, 2025E at 8.567 billion, and 2026E at 9.679 billion, with growth rates of 13.36%, 12.46%, and 12.98% respectively [2]. - The net profit estimates are 2.684 billion for 2024E, 3.074 billion for 2025E, and 3.522 billion for 2026E, with growth rates of 17.32%, 14.51%, and 14.59% respectively [2]. - The diluted earnings per share (EPS) are projected to be 3.36 for 2024E, 3.84 for 2025E, and 4.40 for 2026E [2]. Product Performance - In Q3 2024, the company’s mid-to-high-end liquor segment generated revenue of 1.296 billion, up 7.1% year-on-year, while the ordinary liquor segment saw a decline of 9.2% to 336 million [1]. - The company is actively refining its distribution strategy by streamlining product categories among distributors, which is expected to stabilize sales of older product lines [1]. Market Position - The company’s gross margin for the first three quarters of 2024 was 74.28%, an increase of 3.1 percentage points year-on-year, driven by a higher proportion of premium products [1]. - The report indicates that the company has a reasonable level of channel and terminal inventory, setting a solid foundation for sales during the Spring Festival [1].