DEEJ(000423) Huachuang Securities·2024-11-01 12:46Investment Rating - The report maintains a "Recommended" rating for the company with a target price of 70.4 CNY, compared to the current price of 58.86 CNY [1]. Core Insights - The company reported a revenue of 4.33 billion CNY for the first three quarters of 2024, representing a 26% year-over-year increase, and a net profit of 1.15 billion CNY, up 47% year-over-year [1]. - The core products, including Ejiao blocks, paste, and cakes, are expected to show stable growth, with significant increases in sales driven by marketing efforts and policy changes [1]. - The management team has undergone changes, with a focus on enhancing shareholder returns, including a substantial cash dividend of 7.37 billion CNY, which accounts for 99.77% of the net profit for the first half of 2024 [1]. Financial Performance Summary - For 2024, the company is projected to achieve total revenue of 5.91 billion CNY, a 25.4% increase from 2023, and a net profit of 1.49 billion CNY, reflecting a 29.6% growth [2]. - The gross margin for Q3 2024 improved by 3.2 percentage points to 75.1%, while the net margin increased by 6.1 percentage points to 26.1% [1]. - The company’s operating cash flow for the first three quarters of 2024 was 1.44 billion CNY, indicating healthy cash flow management [1]. Product Performance - Ejiao blocks are expected to see double-digit growth in revenue for the first three quarters of 2024, supported by ongoing brand enhancement initiatives [1]. - Ejiao paste is projected to grow by 40-50% in revenue due to favorable policy changes and marketing strategies [1]. - Ejiao cakes are anticipated to grow by 15-20% in the same period, with online channels contributing to the revenue growth of Ejiao powder, which is expected to exceed 100 million CNY [1].