King's Luck(SH:603369) Huachuang Securities·2024-10-31 12:28Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 75 yuan, compared to the current price of 43.94 yuan [1]. Core Insights - The company reported a revenue of 9.94 billion yuan for the first three quarters of 2024, representing an 18.8% year-on-year increase, and a net profit of 3.09 billion yuan, up 17.1% year-on-year. However, Q3 revenue was 2.64 billion yuan, a 10.1% increase year-on-year, and net profit was 620 million yuan, a 6.6% increase year-on-year, indicating a slowdown in growth [1][2]. - The report highlights that the Q3 performance was below expectations due to weakened external demand and increased discounts affecting gross margins. The company is adjusting its annual targets to manage high inventory levels and slow down cash collection [2][3]. - Despite the challenges, the company is expected to maintain its market share in the domestic market, with a focus on core products and a strategy to protect pricing [2][3]. Financial Summary - For 2023A, total revenue is projected at 10.1 billion yuan, with a year-on-year growth rate of 28.0%. The net profit is expected to be 3.136 billion yuan, with a growth rate of 25.3% [8]. - The earnings per share (EPS) for 2024E is estimated at 2.89 yuan, with a price-to-earnings (P/E) ratio of 15 times [8]. - The gross margin for Q3 was reported at 75.6%, down 5.1 percentage points from the previous year, primarily due to policy adjustments and significant discounting [2][3].