King's Luck(SH:603369) Huaxin Securities·2024-10-31 13:17Investment Rating - The report maintains a "Buy" investment rating for the company [1][2] Core Views - The company has shown steady growth with revenue and profit in line with expectations, achieving a total revenue of 9.942 billion yuan for Q1-Q3 2024, representing an 18.85% year-on-year increase [1] - The net profit attributable to shareholders reached 3.086 billion yuan, up 17.08% year-on-year, with a non-recurring net profit of 3.074 billion yuan, reflecting a 16.59% increase [1] - The report highlights an optimization in expense investment, despite a significant decline in gross margin [1] Financial Performance Summary - For Q3 2024, total revenue was 2.637 billion yuan, a 10.11% increase year-on-year, with a net profit of 624 million yuan, up 6.61% year-on-year [1] - The gross margin for Q1-Q3 2024 was reported at 74.27%, down 1.99 percentage points year-on-year, while the net margin was 31.04%, down 0.47 percentage points [1] - The report indicates that sales and management expense ratios for Q1-Q3 2024 were 15.35% and 3.29%, respectively, with a notable increase in sales expenses [1] Product and Market Structure - The product structure remains strong, with rapid growth in markets outside the province. For Q3 2024, revenue from various product categories showed a year-on-year increase, with premium products maintaining robust growth [1] - Revenue from direct sales and wholesale channels for Q1-Q3 2024 was 1.53 billion yuan and 9.731 billion yuan, respectively, indicating a year-on-year increase of 25% and 19% [1] - Revenue from provincial and out-of-province markets for Q1-Q3 2024 was 9.081 billion yuan and 804 million yuan, respectively, with year-on-year growth of 18% and 33% [1] Earnings Forecast - The company is expected to continue its growth trajectory post the 10 billion yuan milestone, with adjusted EPS forecasts for 2024-2026 at 2.86, 3.17, and 3.62 yuan, respectively [2] - The current stock price corresponds to PE ratios of 15, 14, and 12 times for the years 2024, 2025, and 2026 [2]