Yanghe(SZ:002304) Huaxin Securities·2024-11-03 01:31Investment Rating - The report maintains a "Buy" investment rating for the company [4] Core Views - The company is experiencing significant pressure on performance, with total revenue for Q1-Q3 2024 at 27.516 billion yuan, a decrease of 9.14% year-on-year, and net profit attributable to shareholders at 8.579 billion yuan, down 15.92% year-on-year [2] - The company is undergoing a proactive adjustment to its growth strategy, focusing on quality over speed, which has led to a notable decline in profitability [2][3] - The company is adjusting its product structure, facing challenges in the mid-to-high-end market segments, particularly with key products like Dream 3 and Dream 6+ [3] Summary by Sections Performance Analysis - For Q3 2024, total revenue was 4.641 billion yuan, down 44.82% year-on-year, and net profit was 631 million yuan, a decrease of 73.03% year-on-year [2] - The gross margin for Q1-Q3 2024 was 73.81%, down 1.96 percentage points year-on-year, while the net margin was 31.17%, down 2.59 percentage points year-on-year [2] - Operating cash flow for Q1-Q3 2024 was 3.458 billion yuan, a decline of 20.38% year-on-year [2] Product Strategy - The company is focusing on core products across various price segments, but sales in the mid-to-high-end range are under pressure due to overall industry challenges [3] - The company has initiated a large-scale promotional campaign for its high-end products, maintaining brand integrity while adjusting its sales strategies [3] Earnings Forecast - The company has adjusted its earnings per share (EPS) forecasts for 2024-2026 to 5.56, 5.43, and 5.84 yuan respectively, reflecting a downward revision from previous estimates [4] - The current stock price corresponds to a price-to-earnings (P/E) ratio of 15 for 2024, indicating a valuation that remains attractive despite the recent performance challenges [4]