WEIXING NBM(SZ:002372) Soochow Securities·2024-11-01 19:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 3.773 billion yuan for the first three quarters of 2024, a year-on-year increase of 0.71%, while the net profit attributable to the parent company was 624 million yuan, a year-on-year decrease of 28.64%. In Q3 alone, the revenue was 1.43 billion yuan, down 5.24% year-on-year, and the net profit was 284 million yuan, down 25.27% year-on-year [2] - The revenue pressure in Q3 is attributed to increased industry demand pressure, although the retail-focused PPR business is expected to remain resilient. The decline in revenue is influenced by reduced demand in municipal and construction projects, while the acquisition of Zhejiang Keri Company has impacted the revenue consolidation since October 2023 [2] - The gross profit margin remains stable, with sales expense ratio increasing. The gross profit margins for Q1-Q3 2024 were 41.48%, 42.58%, and 43.11%, with a significant year-on-year decline in Q3 due to competitive pricing pressures in the industry. The sales expense ratio increased by 2% year-on-year, mainly due to the consolidation of Zhejiang Keri [3] - Operating cash flow remains strong, with a net cash inflow from operating activities of 812 million yuan for the first three quarters of 2024, showing slight improvement. In Q3, the net cash inflow was 520 million yuan, an increase of 31% year-on-year, indicating high-quality operational status despite pressure on demand and profitability [3] Financial Forecast and Valuation - The company continues to implement its "dual-wheel drive" strategy, focusing on retail channel expansion and engineering business growth. The net profit forecasts for 2024-2026 have been revised down to 1.107 billion, 1.281 billion, and 1.441 billion yuan respectively, with corresponding P/E ratios of 21X, 19X, and 16X based on the closing price on October 31 [4]